3M has entered into a definitive agreement to acquire Corning Precision Lens, a wholly owned subsidiary of Corning Incorporated, for a gross price of $850 million in cash. Corning Precision Lens is the largest world-wide manufacturer of lens systems for rear projection televisions.
Employing approximately 1,500 people, the company currently supplies customers globally from its headquarters in Cincinnati, OH.
In 2002, CRT-based projection televisions represented 98% of unit sales in the large-screen, rear-projection television segment, which is expected to grow at a 35% compound annual growth rate through 2006. LCD televisions are expected to grow at a compound annual growth rate of 56% through this same period, according to the DisplaySearch Quarterly Worldwide Flat Panel Forecast Report, Q2’02.
‘Combining this business with 3M Optical Systems Division will broaden our technology position in the global display industry,’ said W. James McNerney, Jr., 3M chairman and CEO.
‘Lens systems for large-screen, rear-projection televisions are a great complement to our optical film capabilities, which are well-suited to the emerging consumer LCD television segment,’ added Andy Wong, division vice president, 3M Optical Systems Division.
Commenting on the sale, Corning Incorporated’s Vice Chairman and Chief Financial Officer Jim Flaws said, ‘The sale of Corning Precision Lens is part of an overall plan to improve our financial health as we focus on returning to profitability. We will use the proceeds to reduce debt and strengthen our balance sheet, including making an additional contribution to our pension plan.’ Corning said that it would record the results of Corning Precision Lens as a discontinued business starting in the fourth quarter.
The transaction has been approved by the board of directors of both companies and is subject to customary closing conditions and regulatory approvals. The transaction is expected to close by the end of 2002.