Samsung Electronics Buys Samsung Display's 10.16% TCL CSOT Stake

Samsung Electronics has decided to acquire the entire stake that its subsidiary Samsung Display holds in Chinese panel maker TCL China Star Optoelectronics Technology (TCL CSOT). According to a regulatory filing on October 30, the company will buy the 10.16% holding for roughly 1.2718 trillion won. Samsung Display will dispose of all of its shares in TCL CSOT as a result.

Why the stake is changing hands

TCL CSOT is one of China's major display manufacturers and operates a number of LCD production lines. Samsung Display, which has withdrawn from the liquid crystal display (LCD) business and now focuses on organic light-emitting diode (OLED) panels, is understood to have decided to sell because the holding has become less relevant to its operations.

Samsung Electronics sees the matter differently. As a company that sells finished products such as televisions, it needs a reliable supply of LCD panels. The purchase is therefore seen as a way to deepen its cooperation with TCL CSOT and secure its panel supply chain.

What the filing says

In the filing, Samsung Electronics describes the purpose of the acquisition as "strengthening the strategic collaboration relationship." The disclosure does not go beyond that, and it offers no further detail on how the partnership with TCL CSOT might change.

The deal moves the shareholding from a display-making subsidiary to the parent company that actually buys panels. It also reflects a division of roles inside the Samsung group: Samsung Display concentrates on OLED, while Samsung Electronics takes responsibility for the LCD supply its TV and other device businesses depend on.