Corning has announced that it is entering into a series of strategic and financial agreements with Samsung Display, allowing the LCD glass maker to take full ownership of Samsung Corning Prescision Materials (SCP).

　　Corning said it expects the transactions to close in the first quarter of 2014. SCP is Corning's unconsolidated equity venture with Samsung Display that manufactures LCD glass in Korea. Samsung Display currently owns 43% of SCP.

　　After redemption of their interest in SCP, Samsung Display will receive new convertible preferred shares of Corning totaling US$1.9 billion. Samsung Display will also make an additional US$400 million investment in Corning by subscribing to new convertible preferred shares.

　　Using Corning's current share count, Samsung Display's combined investment in Corning would result in approximately 7.4% ownership on an as-converted basis, Corning said, adding there will be a new long-term LCD display glass supply agreement between Corning and Samsung Display through 2023.

　　"We are excited to enter this new era of collaboration in our 40-year equity relationship with Samsung," Wendell P Weeks, chairman, CEO and president at Corning, said. "The agreements provide important financial and strategic benefits to both Corning and Samsung."

　　Weeks added, "Synergies from integrating our worldwide fusion glass assets should approach US$100 million pretax in 2015 and continue to grow thereafter. We believe that accretion to Corning's core earnings per share, on a fully diluted basis of approximately 20% in 2014 and 2015, can be generated from the combination of profits from the soon-to-be acquired 50% of SCP; the resulting manufacturing synergies; and the impact of the additional share repurchase program. The impact of the additional share repurchase program should offset the potential dilution of shares embedded in the convertible preferred security. The transaction should add approximately US$2 billion in annual sales; US$350 million in incremental profit before special items; and approximately US$500 million in additional cash flow to Corning."

　　Corning said it also expects to realize increased flexibility in glass-melting capabilities, which should bring added capital savings. Furthermore, the company will re-evaluate the need for major capital expenditures for additional fusion glass manufacturing assets.