March 28, 2009 / 3:32 AM / 10 years ago

Toshiba to take 100 percent of Panasonic LCD JV: source

TOKYO (Reuters) - Japan’s Toshiba Corp (6502.T) (6502.T) plans to take a 100 percent stake in its struggling liquid crystal display (LCD) joint venture with Panasonic Corp (6752.T), a source with knowledge of the matter said.

Toshiba Matsushita Display Technology, currently owned 60 percent by Toshiba and 40 percent by Panasonic, is the world’s second-largest maker of small and midsized LCD panels used in cell phones, car navigation systems and other devices.

Toshiba has decided to buy Panasonic’s 40 percent stake for several billion yen, the source said, confirming an earlier report in the Nikkei business daily.

No one at Toshiba or Panasonic, formerly named Matsushita Electric Industrial, was immediately available for comment.

The source spoke on condition of anonymity because the deal has not yet been made public.

Hit by falling prices and sluggish demand, Toshiba Matsushita Display is expected to post an operating loss of 30 billion yen on sales of 270 billion yen for the financial year ending this month.

Despite the earnings downturn, Toshiba still views the small and midsize display business as an important business and taking a 100 percent stake will allow it to accelerate decision-making and restructuring, the source said.

Toshiba is planning to cut costs by 300 billion yen in the next business year from April as it braces for its worst-ever annual loss in the year ending this month.

At the same time the deal should allow Panasonic, the world’s top maker of plasma TVs, to focus more of its resources on large displays, though it will still hold 25 percent in another small and midsized LCD venture majority-owned by Hitachi Ltd (6501.T).

Toshiba Matsushita Display held 10.3 percent of the global market for small and midsize LCDs in 2008, second only to Sharp Corp’s (6753.T) 20.2 percent share, the Nikkei said, citing figures from research firm DisplaySearch.

The move will mark the latest realignment of the LCD sector.

Earlier this month NEC Corp (6701.T) said it would close a LCD plant in Japan while Sony Corp (6758.T) and Seiko Epson Corp (6724.T) announced that they were considering an alliance in small-sized LCDs.

After making the venture wholly-owned, Toshiba plans to scale back production of amorphous silicon panels, which have been hit hard by sliding prices, and focus on higher-end polycrystalline silicon panels, the Nikkei said.

Reporting by Sachi Izumi and Kentaro Hamada; Editing by Ben Tan

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