CORNING, N.Y. (AP) — Shares of Corning Inc. jumped Tuesday after it announced a new tie-up with a Samsung Electronics subsidiary that will boost the glass maker's earnings immediately and guarantees that it will supply Samsung with liquid crystal display glass through 2023.
Corning, the maker of Gorilla Glass screens for smartphones and tablets, will acquire the South Korean company's 43 percent stake in Samsung Corning Precision Materials, an LCD glass joint venture in Korea, and will buy out other minority shareholders.
The joint venture makes glass substrates, the key material in high-end LCD televisions, monitors and mobile devices.
In exchange for giving up its stake in the venture, Samsung Display will receive $1.9 billion worth of Corning preferred shares. It will also invest another $400 million in preferred shares of Corning. If converted, the shares would give Samsung Display a 7.4 percent stake in Corning. They are not convertible for seven years.
The transactions are expected to close in the first quarter of 2014.
Corning said its board had also approved buying back $2 billion worth of its shares, which it expects will cover the dilutive effect of issuing preferred shares to Samsung Display.
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