LG Chem will sell its Liquid Crystal Display (LCD) polarizer business to Chinese counterpart Shanshan, the South Korean company said Wednesday.
The business will be sold for US$1.1 billion, while some products such as LCD polarizer for automobiles will be excluded from the deal and remain with LG Chem.
The deal is subject to change, however, as LG Chem still needs the board’s approval while Shanshan needs the go-ahead from its shareholders’ meeting, the South Korean company said.
LG Chem will update the deal’s progress in its filings to South Korean financial authorities at a later date, it said.
With the selling of its LCD polarizer business, the company will focus on IT materials for organic light emitting diode (OLED) instead. IT will grow its OLED polarizers, produced at its factory in Ochang, as a core business, the firm said.
LG Chem has been looking to sell the business for a while now. In the second quarter, it decided to move some of the equipment for LCD polarizer in Ochang to its factory in Nanjing, China.
The South Korean company’s electronic material business posted operating losses of 28.3 billion won last year. LCD polarizer accounts for 75% of the revenue from the business.
The global polarizer market has been dominated by South Korea’s LG Chem and Japan’s Nitto Denko and Sumitomo Chemical, with the three companies accounting for 65% of global production.
Polarizers are used as filters for light __ or polarization __ in LCD. LCD are sandwiched between two polarizing filters. The filters only allow light in a certain wave to pass through.
Sister company LG Display is also reducing its reliance on LCD and grow its OLED business.