Toshiba Corp. will pay 5.5 billion yen for a nearly 20 percent stake in the Polish subsidiary of LG.Philips LCD, forging a partnership with a rival to strengthen its European TV business, the company said Tuesday.
The announcement follows Toshiba's establishment last month of a liquid crystal display TV production and sales company in Kobierzyce, near Wroclaw in southwestern Poland, where production is set to start next August.
Demand for LCD TVs is growing rapidly in Europe and elsewhere, and competition among manufacturers is intense.
Electronics and entertainment company Sony Corp. makes LCD panels for TVs in a joint venture in South Korea with Samsung Electronics Co.
LG.Philips LCD is a joint venture between LG Electronics, South Korea's largest home appliance manufacturer, and Philips Electronics NV of the Netherlands. LG.Philips LCD, based in Seoul, will hold more than 80 percent of the Polish subsidiary, Tokyo-based Toshiba said in a statement.
Toshiba's investment in LG.Philips LCD Poland will allow it to secure a stable supply of LCD panels at competitive prices, the statement said.
"We will leverage this relationship to build an advantageous position in Europe and provide high quality and competitive products," said Toshio Yonezaw, a senior executive vice president at Toshiba.
Toshiba, which also makes laptops and cell phones, has been buying LCD panels for its TVs from outside suppliers, including LG, company spokeswoman Junko Furuta said.
Toshiba hopes to turn out 3 million LCD TVs in Europe by the fiscal year ending in March 2010, including production at a plant in the U.K., the company said, but the latest move may push that figure higher.
Last month Toshiba said it would invest $51 million in the TV Polish plant.