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LG Philips LCD Plans Record-Breaking IPO to Raise Nearly $2bn

Strategic Insights

— 1 min read

LG Philips LCD, the world's second-largest maker of liquid crystal displays (LCDs), is set to raise nearly $2bn through a record-breaking initial public offering (IPO) in July, doubling its initial target. The stock sale would be the largest IPO in the technology sector this year, highlighting the growing influence of flat panel display manufacturers in the electronics industry. Analysts have valued the company, a joint-venture between LG Electronics and Philips, at $10bn-$12bn.

Key Takeaways:

  • LG Philips plans to raise nearly $2bn through an IPO in July, double its initial target of $1bn.
  • The company, a joint-venture between LG Electronics and Philips, is the world's second-largest maker of LCDs.
  • Analysts have valued the company at $10bn-$12bn, with a target to sell a bigger stake than previously expected.
  • The IPO will support LG Philips' plan to invest $21bn in LCD production capacity over the next 10 years.
  • Global LCD sales are forecast to triple to $37bn this year, driven by the replacement of bulky cathode ray tube televisions and monitors.
  • Analysts warn intense competition in the market is driving it towards oversupply, with manufacturers building next-generation plants that produce screens more efficiently.
  • Samsung overtook LG Philips as the number one LCD maker in the first quarter of this year, with 23.6% of sales.
  • LG Philips more than tripled its operating profits to Won1,110bn last year and increased sales by 71% to Won6,030bn.
  • The IPO will be listed in Seoul and New York within the third quarter, with Morgan Stanley and UBS advising LG Philips.
  • The company has declined to comment on the size of the stake to be sold.

Statistics:

  • $2bn: the amount of funds to be raised through the LG Philips IPO.
  • $1.5bn: the amount of funds to be raised in Won, equivalent to $1.5bn USD.
  • $21bn: the amount to be invested in LCD production capacity over the next 10 years.
  • $37bn: the forecasted global LCD sales this year.
  • 71%: the increase in LG Philips' sales last year.
  • 20.8%: LG Philips' share of LCD sales in the first quarter this year.
  • 23.6%: Samsung's share of LCD sales in the first quarter this year.
  • $10bn-$12bn: the analysts' valuation of the LG Philips company.

Sources:

  • Bloomberg News
  • Korea Times
  • DisplaySearch

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