Canon, Hitachi draw up LCD biz deal

Hitachi Ltd and Canon Inc. have completed a formal contract related to a comprehensive LCD panel business alliance. This follows the signing of a basic agreement among Hitachi, Canon and Matsushita Electric Industrial Co. Ltd regarding the alliance last Dec. 25.

Under the terms of this agreement, Canon will acquire a 24.9 percent stake in Hitachi Displays Ltd, a wholly owned Hitachi subsidiary that makes small and medium-sized LCD panels, by March 31 for approximately $406 million, pending regulatory approval. The acquisition price was agreed upon based on an evaluation of Hitachi Displays' value, including a 50 percent shareholders' equity stake in IPS Alpha Technology Ltd, owned by Hitachi Displays.

As the next step, Canon plans to acquire Hitachi Displays' shares owned by Hitachi and Matsushita and to make Hitachi Displays a Canon subsidiary. Meanwhile, Hitachi will consider the continued holding of up to 10 percent of Hitachi Displays' shares.