Tokyo: Japan’s Hitachi Ltd said on Wednesday it would transfer most of its stake in an LCD panel joint venture to Panasonic Corp for $717 million, shrinking its investment in the venture to 5 percent.
Panasonic’s stake in IPS Alpha Technology, which designs, manufactures and sells large LCD TV panels, will rise to 92% from 44.98%. Hitachi’s stake will fall from 50.02%.
A Hitachi spokesman said the transfer was valued at 63.5 billion yen ($717 million), generating a profit of about 60 billion yen for Hitachi. He said it is already reflected in its earnings forecast for the year to March 2011.
The companies initially revealed the share transfer plan in 2008, when Hitachi said it would consider holding up to 10% of IPS Alpha stake.
Hitachi Displays, Hitachi’s wholly owned unit which currently holds just over half of IPS Alpha, will set up a new company to transfer its stake in the venture to Panasonic and Hitachi, its parent.
Development Bank of Japan and others collectively have 5% of IPS Alpha.
Before the announcement, Hitachi shares fell 1.2% to 324 yen, and Panasonic shares dropped 1.1% to 1,122 yen. The benchmark Nikkei average fell 2%.