Samsung to acquire Germany's Novaled for €260m

Samsung snaps up OLED maker to help expand production capability.
Written by Michael Filtz, Contributor

Samsung and its affiliate Samsung Cheil Industries announced today that they are to acquire Novaled, a German company that develops and commercializes organic light-emitting diodes (OLEDs) for use in displays and lighting.

According to a statement by Novaled, the total deal is valued at €260m. Samsung affiliate Cheil Industries, which specializes in electronic materials and chemicals, will acquire a majority stake of around 50 percent, while another 40 percent will be acquired by Samsung Electronics. The remaining 10 percent stake is already held by the Samsung Venture Investment arm, which invested in the company in 2011.

The deal's €260m figure includes a €30m contingent payment, which is based on reaching "certain milestones", according to Novaled.

OLED panels. Image: Novaled

With the acquisition, Samsung is expected to expand production capacity for OLED displays, which can help make gadgets thinner and lighter, and can provide more consistent color than displays with traditional LED technology, but currently come with a higher manufacturing cost.

Samsung currently uses OLED technology in many of its smartphone and tablet displays, including the Galaxy S4 and the Galaxy Tab 7.7. The company has also begun introducing the technology to televisions, including a $15,000 curved 55-inch set that launches in the US this month.

In 2012, Novaled, which is based in Dresden, generated revenues of €26m — fueled by the sales of Samsung's Galaxy smartphones.

Samsung intends to keep at least some of Novaled's research and development operations in Germany: "Cheil Industries plans to grow Novaled's existing R&D activities and concentrate a main part of its OLED R&D strategy in Dresden," according to Novaled.

The deal is subject to approval from regulators and relevant authorities.

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