Sony sells its half stake in TV joint venture to Samsung

Television manufacturers are outsourcing LCD screens production as competition and weak demand squeeze profits Photograph Thomas Collins/Getty

Sony has sold its nearly 50% stake in joint venture with Samsung Electronics to the South Korean company for $940m (£602m), as the Japanese company struggles to cut its losses at its TV business.

The venture for liquid crystal display (LCD) had been subject to rumours that Sony was negotiating an exit, aiming to switch to cheaper outsourcing for flat screens for its TVs while Samsung pushes ahead with next-generation displays.

"In terms of direction it is a positive [for Sony]," said Keita Wakabayashi, an analyst at Mito Securities in Tokyo, about the deal. "But if they are making a loss on the sale, one could ask why they didn't make this decision sooner."

"Their biggest problem is that they are not making a profit even though they don't have many plants," he said.

In November, Sony, the world's third largest flat panel TV maker, warned of a fourth straight year of net losses for the financial year to next March, with its TV unit alone set to lose $2.2 bn on tumbling demand and a surging yen.

The company said on Monday it would review its earnings forecast to reflect ¥66bn in impairment losses from the transaction.

While the sale is seen as a move in the right direction for Sony, it will not be good for Samsung, analysts said.

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