Suzhou Sanlepu purchased LG Chem's polarizer 70% LCD and 30% OLED business for 9 billion

by:Kimeery     2021-05-27

LG Chem started to sell its polarizer business last year. Domestic materials companies such as Ningbo Shanshan and Sanlipu have participated in merger negotiations and due diligence. Recently, RUNTO has learned that Suzhou Sanlepu Optoelectronics has become the final winner and will purchase LG Chem’s polarizer 70% LCD and 30% OLED business for approximately RMB 9 billion.

Operating losses are the incentive for LG Chem to sell its polarizer business

LG Chem is a leader in large-size polarizers. At present, LG Chem has the largest shipment area in the world, accounting for 30% of the global market, and its customer base covers almost all panel companies in the world, and has established legal persons in Beijing, Nanjing and Guangzhou in China.

2014-2019 global polarizer market share changes

Data source: Runto Technology (RUNTO)

Since 2018 Affected by the severe overcapacity of downstream large-size LCD production capacity and continued deteriorating revenue, the price of large-size polarizers has begun to drop sharply, resulting in serious losses for Nanjing and Guangzhou legal entities, except for their Beijing legal entities that are slightly better.

All photoresists and polarizers were sold, LG Chem focused on new businesses

At the end of last year, LG Chem carried out the largest personnel adjustment in its history. LG Chem’s Advanced Materials Division transferred more than 500 people to the petrochemical and battery divisions during the LCD material business sales process, with the aim of cooperating with the Group’s OLED leading strategic business. After LGE and LGD, LGC's strategic concept of 'choice and focus' gradually emerged.

Earlier on February 25, Siyang International, a subsidiary of Jacques Technology, signed a 'Business Transfer Agreement' with LG Chem, stipulating that Siyang International would purchase it at a price of 58 billion won (approximately RMB 335 million) Part of the operating assets of the Color Photoresist Division of LG Chem. Invest in the construction of a color photoresist production plant in South Korea within 18 months after the completion of the delivery of the underlying assets. The initial estimated investment in the plant project is approximately RMB 200 million.

With the transfer of control over the photoresist and polarizer business, LGC Chemical has gradually sold many businesses such as water treatment, photoresist, glass, and lighting.

Prior to this, LG Chem and Dow DuPont signed a contract to acquire Soluble OLED material technology for 200 billion won. In the future, the cutting-edge materials division will focus on LCD for Samsung.

LG Chemical Organization Chart

Source: LG Chemical Official Website

The determination to localize materials is highlighted, and the industrial landscape will change.< /p>

According to public information, Suzhou Sanlepu Optoelectronics was established on April 17, with a registered capital of 6 billion, 95% of the shares are held by Tinglin Capital (Zhuhai) Investment Management Partnership, and Tinglin Venture Factory (Kunshan) invested Co., Ltd. holds 5%, and Tinglin Venture Factory is held by Baiyue Derun (Kunshan) Investment Management Center with 30%. At the same time, Tinglin Capital, Tinglin Venture, and Baiyue Derun’s controlling shareholders are all the same person.

Suzhou Sanyuepu Optoelectronics Equity Chart

Source: Runto Technology (RUNTO) compiled according to public information

At the same time, Tinglin There are also intricate equity relationships with companies that have been active in the field of polarizers in recent years, including Jinjiang Group, Kunshan Chimei, Shenzhen Textile, and Shengbo Optoelectronics.

Kunshan Chimei u0026 Shengbo Optoelectronics Equity Chart

Source: Runto Technology (RUNTO) compiled according to public information

From According to the analysis of the equity of each shareholder, the actual controller of Suzhou Sanlepu Optoelectronics may be Kunshan Capital. Chris Wang, general manager of RUNTO, analyzed that through the changes in the industry chain in recent years, LCD panels have gradually shifted their voice to mainland China. South Korean material manufacturers had to sell related businesses under operating pressures. In order to take into account factors such as supply chain security, technology integration, and profit improvement, the mainland also has the determination and plan to localize materials and equipment. In fact, not only polarizer materials, but almost all raw materials of LCD, including glass, liquid crystal, film materials, chips, photoresist, etc., and even key OLED materials, land plants or land capital are entering. The global display panel supply chain is setting off a magnificent rewrite.

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