07.14.21
Japan Display Inc. (JDI) decided at its Board of Directors meeting to approve the signing of a term sheet between Wise Cap Limited Company, a wholly owned subsidiary of Wistron Corporation, an EMS to whom JDI outsources module manufacturing, JDI Taiwan, Inc. (JDIT), a wholly owned subsidiary of JDI, and Kaohsiung Opto-Electronics Inc. (KOE), a wholly owned subsidiary of JDIT.
The term sheet specifies that JDIT, Wise Cap, and KOE will hold discussions to finalize the sale of all KOE shares to Wise Cap. Wise Cap, JDIT, and KOE all signed the term sheet. The sale price is JPY 8 billion ($72.3 million).
At the completion of the share sale, KOE will be excluded from the scope of consolidation
JDI is working to strengthen its competitiveness and drive growth by optimizing its asset profile, increasing its cost-competitiveness, and diversifying its supply chain. As part of these strategic initiatives, JDI has decided to sell the shares of KOE, which designs and manufactures LCD modules for JDI, to Wistron Group.
Wistron Group has been a significant and trusted partner of JDI to whom JDI outsources smartphone display module manufacturing for many years. By joining Wistron Group, KOE is expected to benefit from the scale and resources of Wistron Group, an EMS with advanced technological capabilities and strong purchasing power, thereby improving JDI’s cost-competitiveness.
JDI has agreed with Wistron Corporation to enter into a new EMS contract with KOE at the time of the share sale and continue outsourcing the manufacturing of display modules for automotive and industrial devices to KOE in order to strengthen the competitiveness of JDI’s core automotive and industrial businesses.
By shedding assets and converting fixed costs to variable costs, JDI believes that the share sale will increase JDI’s operating flexibility, ability to respond quickly to changes in market environment, core earnings power, and capital efficiency. Furthermore, JDI will use this share sale as an opportunity to further strengthen its ties with Wistron Group.
The term sheet specifies that JDIT, Wise Cap, and KOE will hold discussions to finalize the sale of all KOE shares to Wise Cap. Wise Cap, JDIT, and KOE all signed the term sheet. The sale price is JPY 8 billion ($72.3 million).
At the completion of the share sale, KOE will be excluded from the scope of consolidation
JDI is working to strengthen its competitiveness and drive growth by optimizing its asset profile, increasing its cost-competitiveness, and diversifying its supply chain. As part of these strategic initiatives, JDI has decided to sell the shares of KOE, which designs and manufactures LCD modules for JDI, to Wistron Group.
Wistron Group has been a significant and trusted partner of JDI to whom JDI outsources smartphone display module manufacturing for many years. By joining Wistron Group, KOE is expected to benefit from the scale and resources of Wistron Group, an EMS with advanced technological capabilities and strong purchasing power, thereby improving JDI’s cost-competitiveness.
JDI has agreed with Wistron Corporation to enter into a new EMS contract with KOE at the time of the share sale and continue outsourcing the manufacturing of display modules for automotive and industrial devices to KOE in order to strengthen the competitiveness of JDI’s core automotive and industrial businesses.
By shedding assets and converting fixed costs to variable costs, JDI believes that the share sale will increase JDI’s operating flexibility, ability to respond quickly to changes in market environment, core earnings power, and capital efficiency. Furthermore, JDI will use this share sale as an opportunity to further strengthen its ties with Wistron Group.
