Philips Invests $1.6 Billion in Joint Venture with LG

Royal Philips Electronics of the Netherlands and LG Electronics (LG) of Korea signed a letter of intent under which Philips will acquire a 50% share in LG LCD, the active matrix liquid crystal display business (AMLCD) of LG. Philips' investment is valued at approximately $1.6 billion.

The new company will begin as a manufacturing and technology joint venture with the potential to develop into a full joint venture over time, incorporating all the AMLCD activities of both companies. LG LCD and Philips will hold equal rights to manage the four joint venture.

LG LCD is comprised of three production facilities in Kumi, Korea. As part of the deal production capacity at two of the Kumi sites will be expanded, and manufacturing of 680x880mm mother glass which will be the largest on the market, will be established at the third facility.

Closing of the transaction should occur at the end of July, and the joint venture will officially start in August 1999.