Sumitomo Chemical to acquire OLED specialist CDT

The acquisition of Cambridge Display Technology will enable Sumitomo Chemical to accelerate development of large OLED displays.

Sumitomo Chemical has agreed to pay around $285 million to acquire Cambridge Display Technologies (CDT), the leading developer of polymer OLED materials and displays based in Cambridge, UK.

Sumitomo Chemical says that the deal will enable it to step up its efforts on the early commercialization of P-OLED displays, particularly large-screen, high-definition televisions, with a view to the possibility of alliances with display manufacturers.

Sumitomo Chemical will acquire all outstanding shares of CDT common stock at a price of $12 per share in cash, for an aggregate purchase price of approximately $285 million. This represents a 95 percent premium over CDT's closing share price of $6.15 on July 30. CDT was established in 1999 and had sales of $8 million in 2006.

In November 2005, Sumitomo Chemical and CDT established the joint venture Sumation Co., Ltd. for the development, manufacture and sale of P-OLED materials. The companies say that the combination of their technologies has achieved remarkable advances in materials performance, and is now approaching the level of practical application.

Polymer OLEDs (P-OLEDs) are processable in solution and can therefore be applied using a printing technique to form the luminescent substrate, making possible the highly productive manufacture of large-size panels at low cost.

The market for P-OLEDs is expected to see rapid growth going forward, primarily for use in next generation displays for large-screen televisions and in lighting applications.

Sumitomo Chemical's development of P-OLEDs began in 1998, and the Japanese company has worked with CDT since 2001 under an agreement that included technology licensing for light-emitting materials. In May 2002, Sumitomo Chemical made equity investment in CDT Ltd. to build a closer working relationship for the commercialization of P-OLEDs.

CDT possesses fundamental intellectual property related to OLED displays and materials, while Sumitomo Chemical possesses a broad range of state-of-the-art chemical technologies.

This acquisition, integrating the two companies' business resources, will enable Sumitomo Chemical both to improve the performance of light-emitting materials and OLED display-related materials and also to further accelerate the development of commercial technologies for the manufacture of OLED displays, serving its customers as a total solution provider to meet their diverse requirements from materials to processes.

In connection with this transaction, major CDT shareholder Kelso & Company along with certain members of CDT's senior management and other shareholders holding cumulatively an approximate 43% of CDT's common stock have entered into agreements to vote all their shares in favor of the transaction at their shareholders' meeting.

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