The big difference between the way that LG and B&O operate, is that Bang + Olufsen who earlier this week reported a US$14.6M loss, is tipped to not dicount their OLED TV models within weeks of them going on sale.
The Company claims that by selling top end OLED TV's they believe that they can achieve scale that will eventually improve the company's long-term profitability.
Currently the Company is primarily selling their B&O products through their own stores. They have also attempted to expand the B&OPlay range into mass retailers and the specialist Hi Fi channel in Australia where they are having limited success.
B&O, which posted an earnings loss in its fiscal first half ending November 2015, currently offers LCD TVs and expects to offer its first OLED TV in 2017.
The company didn't say whether it would transition all of its TVs to OLED.
In its first collaboration with LG, B&O announced earlier this year that is it bringing its audio expertise to bear on select LG smartphones.
With the OLED collaboration, B&O said the LG partnership "will help solve a key strategic challenge as Bang & Olufsen will achieve technological capabilities and scale needed to improve the long-term profitability of the company."
B&O will be able to "focus on core competencies within acoustics and design while further optimizing the company's supply chain, development, production and service," B&O added.
The partnership also "involves collaboration in other areas such as license and product bundle activities," B&O said without elaboration.
The agreement could save B&O as much as $22.6 million to $30.1 million when fully implemented over the next three years, the company said.
In its first half, B&O posted an earnings loss after taxes of $14.6 million, less than the year-ago loss of $27.3 million, on a revenue gain of 18.1 percent to $186 million.
Overnight B&O disclosed that Qi Jianhong, a Hong Kong investor who heads a luxury-goods distributor, is in talks to buy the struggling Company.
According to analysts the Company that has a mountain of debt is only worth $450 million.
Bang & Olufsen overnight issued a statement referring investors to an announcement by Mr. Qi, chairman of Hong Kong-listed distributor Sparkle Roll Group Ltd.
The announcement said Mr. Qi was working on a bid for Bang & Olufsen shares, but had yet to overcome certain obstacles. Sparkle Roll is a distributor of Bang & Olufsen products in Asia.
"A condition for making an offer is that we are comfortable it will be possible for us to acquire all shares in Bang & Olufsen at a price we find reasonable," Mr. Qi said in the statement
Public relations firm Kreab initially said the Hong Kong-listed company was working on a possible bid. Later, the public relations firm clarified that should an offer materialize, it would emanate from a separate entity, wholly owned by Mr. Qi and called Sparkle Roll Group Ltd. BVI.
Should a deal succeed, it would add to a surge in Chinese mergers and acquisitions that already look set to easilytop last year's record $106 billion investment in foreign M&A deals. The Wall Street Journal reported last week that Chinese companies already have agreed to $102 billion in foreign deals this year.
Bang & Olufsen is in the midst of a makeover, trying to turn around its traditional business of selling upmarket audio and television equipment while expanding in lower-end consumer goods with a new brand, B&O Play. As part of the restructuring of its TV operations, the company said last week that it would stop making flat screens, sourcing them from South Korea's LG Electronics Inc., instead.
Despite these efforts, and the sale of the company's automotive sound-system business to Harman International Industries last year, Bang & Olufsen hasn't posted a full-year profit for the past three years.