LG Display received a letter of intent from a Chinese manufacturer to acquire the Guangzhou LCD factory, and the opinion of another shareholder Skyworth became key

News from this site on March 8, according to Korean media DealSite, LG Display (LGD) has recently received a letter of intent from a Chinese manufacturer to acquire the Guangzhou LCD factory.

The Guangzhou LCD factory is 70% owned by LGD, 20% owned by Guangzhou High-tech Zone Technology Holding Group Co., Ltd., a wholly state-owned enterprise, and the remaining 10% shares belong to Skyworth.

▲ LG Display Guangzhou LCD factory. Source: LG Display Editorial Room

Analysts believe that the Chinese manufacturer is likely to be BOE, and the two parties are expected to reach a transaction agreement within the first half of the year. However, some sources pointed out that LGD and BOE have very different price issues, which will have a negative impact on the negotiations.

Some sources also believe that China Star Optoelectronics may be the company that submitted the letter of intent.

According to reports from the same media at the end of last year, Samsung Display, as the second largest shareholder of CSOT, has been working hard to indirectly acquire the LGD Guangzhou factory by investing in the company.

LCD panels for Samsung QLED TVs are currently produced by LGD in Guangzhou. If it is handed over to CSOT, it will help ensure the stability of the panel supply chain for Samsung's own TV products.

However, CSOT’s parent company TCL also operates the TV business and has a competitive relationship with Skyworth, another shareholder of the Guangzhou LCD factory. If CSOT completes the acquisition, it may conflict with Skyworth's interests. It is reported that Skyworth is opposed to LGD selling assets to CSOT.

According to reports from this site, LG Display issued a clarifying announcement last month stating that they are evaluating the future of LCD strategic assets, including the LCD factory in Guangzhou. However, they have not yet made concrete plans or decisions on whether to sell these assets. LG Display seems to be seriously considering its future direction and maintaining a prudent attitude to ensure that the decisions it makes are in the company’s interest. This cautious and prudent attitude shows that LG Display has

industry insiders estimate that the new owner of the Guangzhou factory will not be officially determined until June.

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