Acquiring Majority Share in Novaled AG

Cheil Industries, a leading electronic materials company in the display industry, will buy Novaled AG, a German-based organic light-emitting diode (OLED) company.

The affiliate of the Samsung Group announced on August 9 that it decided to buy the German firm in an attempt to reinforce its position as a world leader in the field of electronic materials. 

The deal involves Samsung Electronics and Samsung Venture Investment Corporation (SVIC), along with Cheil Industries itself. The total costs are 345.5 billion won (US$311.0 million). Cheil will acquire a majority 50 percent stake in Novaled by investing 173.1 billion won (US$155.8 million), while Samsung will purchase 40 percent. The remaining 10 percent is currently owned by SVIC, which will keep its existing shareholdings. 

Founded in 2001 as a spinoff of the Dresden University of Technology, Novaled AG holds proprietary organic conductivity doping technology and more than 500 patents (granted or pending), making it a major player in OLED technologies and display materials. Last year, the company generated revenues of 38 billion won (US$33 million), and reported net losses of 2.5 billion won (US$2.24 million). It is renowned for its abundance of human resources in the research & development field, with more than 60% of researchers consisting of well-educated professionals with a M.A. or a Ph.D.

Cheil Industries considers that this acquisition will create synergy in the OLED businesses, and get a better foothold in the market for high value-added displays through the domestic production of materials. 

Since April, the company has been producing and supplying electron transport layers, one of the major OLED materials, to Samsung Electronics. 

Cheil Industries' CEO Park Jong-woo said, "The future direction of the display market will be decided by who has the technological capacity to develop key materials," adding, "The company expects that its buyout of Novaled AG will serve a major turning point to consolidate its leading position in the field of electronic materials by achieving R&D synergy in new-generation OLED materials."