If this comes true, this is definitely a classic IP play.
I do remember my meeting in Korea with ex-Apple engineer Brian Berkeley, who became vice president of OLED R&D Center at Samsung Mobile Display Co.. That was a few years ago, but I did know then that Samsung's totally committed to dominating the OLED development and OLED market. Whatever IP they need, they will get it.
Anytime we see a larger company investing in a smaller one, it's easy to jump to the conclusion there's a takeover in the works. It might be. But remember that large companies invest in smaller ones all the time -- not that unusual. So I have my doubts until someone willing to be quoted by name confirms the information. It is reasonable to expect a company official to give a name, even if they're not prepared to release details. I've seen too many deals that were attributed to Mr. Noname that never happened, although this one makes some sense.
Rick: Good point. But what we don't know is how much Samsung has already pitched into this effort, and whether its acquisition could be meant to block another suitor -- if there's an acquisition actually underway. This could be a bluff to scare off others who want to acquire what the company has developed. We need more info before making sense of this, I think.
It's about the patents, and materials expertise, apparently.
According to reports Samsung was in a bidding war for Novaled with another Korean company Doosan which took the price much higher than $200 million in the last couple of months but those reports also indicate that Doosan has now dropped out of the bidding.
In essence I think this is a Samsung versus LG patent battle to control the manufacturing (through patents and know how) of the best, most seductive emissive full-color, large-size (and small-size) displays.
Peter: That makes a good deal of sense. Now the story becomes much more interesting from a strategic sense -- the use of M&A as a competitive weapon. For example, did Doosan really want to buy the company at that cost, or did it strategically make a high bid, knowing that Samsung would have to respond with a bid of its own? And when Samsung did offer more, Doosan bid again. Then when Samsung stopped outbidding it, Doosan dropped out because it didn't really want Novaled at that price.
Now the question is: Will Samsung follow through to avoid a repeat? Or will it also drop out?
The rumor from an unidentified Novaled exec could have been a ploy to attract other bids and encourage Samsung to complete the deal. Otherwise, why leak it?
That is interesting that the leak came from Chiel, which has no good reason to leak it. I suppose the news could keep other bidders at bay, especially if they think the rumored price is already too high. If the deal goes through, we may never know how much Samsung really paid, but I suspect the amount could be less than the $200 mln.