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Bang & Olufsen outsources TV production to LG

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Bang & Olufsen outsources TV production to LG
A B&O employee assembles a 105-inch TV in Struer. Photo: Henning Bagger/Scanpix
12:04 CET+01:00
Bang & Olufsen, the Danish maker of upmarket sound systems and televisions, said on Friday it had entered a partnership with LG Electronics to outsource its production of televisions.
The struggling Danish firm, which said in November it was in talks with a potential buyer, said the deal "will address Bang & Olufsen's key challenges related to scale and complexity".
 
It would enable the group "to stay at the forefront of innovation in the TV category, a category which is currently undergoing significant change," chief executive Tue Mantoni said in a statement.
 
The group, which also makes sleekly designed speakers, soundsystems and headphones, said it would now focus on its core know-how in design and acoustics.
 
The move would result in annual savings of between 150 and 200 million kroner ($23 million-$30 million, €20-27 million), it said.
 
The partnership's first TV using organic light-emitting diode (OLED) displays -- screens that deliver a more vivid picture quality and consume less electricity -- is expected to be launched next year.
 
In February, South Korean LG unveiled its first modular smartphone, the G5, which came with a sound system developed by Bang & Olufsen.
 
Shares in the Danish company soared in November after it said it was in talks over a potential takeover offer.
 
On Friday it said that the talks were continuing but that no binding offer had been made.
 
Founded in 1925, the Copenhagen-based company has posted annual losses over the past three fiscal years as more people listen to music on their mobile devices and after failing to attract younger consumers.
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