Mergers: Commission approves proposed joint venture between Samsung Electronics and Samsung SDI
- European Union
- 01/23/2009
The European Commission has approved under the EU Merger Regulation the acquisition of joint control over a joint venture, Samsung Mobile Display, by Samsung Electronics and Samsung SDI, both of Korea. Samsung SDI had previously spun off its activities in the area of small and medium LCD panels and organic light-emitting diodes (“OLEDs”), a specific type of ultra thin, ultra bright display technology which does not require a backlight, into Samsung Mobile Display, which is currently solely controlled by Samsung SDI. The Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.
Samsung SDI is active in the development, manufacture and sale of products in the digital display and energy businesses. It consists of four business divisions: Panel Display Panel, Rechargeable Battery, Mobile Display and Cathode Ray Tube.
Samsung Electronics is engaged in the development, manufacture and sale of a wide range of products in the area of electronics and information technology. Samsung Electronics is organised in four main units: Digital Media, Telecommunication Network, Semiconductors and Liquid Cristal Displays (“LCD”). The LCD business produces panels for TVs, digital information displays, notebook PCs and desktop monitors, as well as various display panels for mobile products. Samsung Electronics is Samsung SDI’s largest shareholder with a non-controlling 20.4% stake.
The Commission’s market investigation revealed that the acquisition of joint control over Samsung Mobile Display would not raise horizontal concerns in the overall market for the development and manufacturing of small and medium size displays. Notably, in the AM-OLED (Active-matrix OLED) technology, a display technology for use in mobile devices like mobile phones where Samsung SDI is currently the leading supplier, the joint-venture has no ‘must-have’ technologies and its competitive behaviour would be constrained by a number of strong competitors and potential entrants.
The proposed transaction would give rise to vertical links, since Samsung Electronics manufactures both electronics components used in small and medium size displays and portable/handheld applications containing small and medium size displays. However, in view of the parties’ limited market power in all markets concerned, the Commission concluded that the transaction would not raise competition concerns based on vertical relationships.
