Mergers often end up with some corners being cut (cost savings in corporate parlance), resulting in a leaner and often meaner entity. Of course, there will be collateral damage along the way, but then again that is to be expected. The latest news that is going around would be three Japanese giants, Sony, Toshiba and Hitachi working together to merge their liquid-crystal display (LCD) operations by taking advantage of the $2.6 billion government-backed funds in order to hold their ground against fierce competition from rivals who hail from South Korea and Taiwan.
This merger would mean the final entity ends up as the world’s largest manufacturer of small panels that will see action in a plethora of devices, including smartphones and tablets, helping them surpass global leaders Sharp Corp. of Japan and Samsung Electronics of South Korea.
In addition, this move intends to help the firms place more focus and emphasis on their main operations. It seems that the 90% government-owned fund might just come under fire as public money is being used to prop up a volatile business. Not too sure what the Japanese taxpayers have to say about the situation though – what do you think?