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Corning Seeks Acquisition Targets

Post Time:Nov 30,2009Classify:Company NewsView:477

Corning Inc. is confident revenue in the current fourth quarter will come in at more than $1 billion and is seeking acquisition targets after its purchase of Axygen BioScience Inc. in September, its top executive said.

"We're looking around. It hasn't been a very active effort in the past seven or so years but we are starting to reactivate," said Peter Volanakis, Corning's president and chief operating officer, in a recent interview.
The New York-based company, the world's biggest producer of glass used in liquid-crystal-display televisions by volume, acquired all of the shares of laboratory equipment maker Axygen from American Capital Ltd. for about $400 million. Axygen was integrated into Corning's life sciences segment.
Corning also has operations in display, telecommunications, specialty materials and environmental technologies.
Mr. Volanakis said the company has about $3 billion in cash and is looking at targets across all of its divisions. But he said the company isn't in any concrete talks at the moment.
"We still have a very healthy, internal investment portfolio that is R&D driven. That's our primary vehicle for growth. But we will supplement that with acquisitions when appropriate."
Corning's display technologies business is by far the biggest revenue and profit generator for the company. In the third quarter, sales from that division amounted to $670 million out of total sales of $1.5 billion. Net income from the display business amounted to $600 million out of total net income of $643 million.
Mr. Volanakis said Corning is in talks with provincial governments in eight regions in China to build a glass manufacturing facility there. The company currently has a glass finishing facility in Beijing.
As major customers including Samsung Electronics Co. and Sharp Corp. move to build advanced display manufacturing plants in China, Corning is also evaluating a plan to set up a glass manufacturing facility there.
In Japan, for example, the company in October opened the world's biggest glass factory next to Sharp's state-of-the-art 10th-generation LCD facility, which can churn out flat panels bigger than 60 inches for televisions.
Samsung has said it plans to set up a joint venture to build an LCD plant in Suzhou, China, that will cost about 2.6 trillion won ($2.25 billion).
"We're in discussions with a number of regions....talking to customers, government officials to sort out when and where is the best place to operate, he said, adding Beijing, Suzhou, Guangzhou, Chengdu and Nanjing are some of the cities the company is exploring. "Given where China is going, we will be there at the right time."
LCD TVs sold in China during the first half of this year rose 86% to 9.5 million units from 5.1 million units a year earlier, the strongest pace of growth in the world, according to market research firm DisplaySearch.
The executive said glass supply globally remains "very tight" in the fourth quarter and heading into the first quarter, which bodes well for Corning.
Corning suffered a power outage in October at its glass plant in Taichung, Taiwan. In August, an earthquake at a facility in Japan disrupted production, leading to a global shortage of glass. Due to charges related to these events, the company expects its gross margin in the fourth quarter to be similar to the third quarter's 41%.

Source: CorningAuthor: shangyi

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