Samsung Display to dump entire stake in LCD equipment maker

South Korea’s Samsung Display Co. is set to sell its stake in a domestic liquid crystal display equipment maker as the unit of global tech giant Samsung Electronics Co. dropped the LCD business.

Samsung Display on Thursday sold a 4.3% stake in SFA Engineering Corp., or 1.5 million shares, at an estimated up to 54 billion won ($41.1 million) in a block deal before the local stock market opened, according to investment banking industry sources. The estimated sale prices were discounted from the stake’s value of 58.6 billion won on Wednesday.

Samsung Display plans to unload the remaining 5.85% stake in the company later, the sources said.

After the news, SFA’s share prices lost as much as 12.1% to 34,350 won, the lowest since March 16.

SFA was founded in late 1998 after being separated from the automation division of Samsung Aerospace, currently Hanwha Aerospace Co. Samsung Display was the second-largest shareholder with a 10.15% stake before the sale after DY Holdings Co., which held 40.98%.

SFA suffered a 14.8% drop in operating profit to 160.9 billion won in 2022 despite a 7.6% growth in sales to 1.7 trillion won.

POSSIBLE SALES OF STAKES IN OTHER COMPANIES

Samsung Display decided to sell the stake after exiting the LCD business in June last year. The company, which held the shares of SFA for the stable procurement of LCD equipment, did not need to keep them given the withdrawal.

The sale raised expectations that Samsung Display may unload stakes in other companies to raise money for investments.

Samsung Display currently holds 3.77% in local semiconductor and display equipment maker Wonik IPS Co., 2.28% in its holding company Wonik Holdings Co., 3.31% in organic light emitting diode (OLED) materials maker Duk San Neolux Co. and 3.13% in an industrial equipment manufacturer SNU Precision Co.

Samsung Display is also the second-largest shareholder of a global materials maker Corning Inc. with a 9.45% stake. The South Korean company plans to keep the stake until 2028 to maintain cooperation with the US partner.

Samsung Display 2021 sold 35 million shares in Corning back to the US company for an estimated $1.6 billion in a deal that will slash Samsung’s stake in Corning to 9% from 13%.

Write to Ik-Hwan Kim and Byung-Keun Kim at lovepen@hankyung.com
 
Jongwoo Cheon edited this article.