Samsung Display and Corning reached a deal Wednesday to pave the way for the Samsung unit to become the largest shareholder of the New York-based glassmaker, Samsung officials said.

Under the agreement, Samsung Display will acquire Corning’s convertible preferred shares that can be converted into ordinary shares in seven years. The deal is scheduled to be signed early next year.

Samsung Display said it will invest a total of $2.3 billion to gain a 7.4 percent stake in the U.S. firm.

According to the agreement, Samsung Display would sell to Corning its 43 percent stake in their LCD panel joint venture, Samsung Corning Precision Materials Co. Corning owns 50 percent of the joint venture.

“Samsung has maintained a partnership by jointly running plants. But now the glass industry itself is changing globally, and we need greater cooperation,” said Rhee In-yong, president of Samsung Group Corporate Communications Team.

Both companies will continue the partnership through long-term contracts for the jointly produced liquid crystal display glass substrate, Samsung Display said.

By Shin Ji-hye (shinjh@heraldcorp.com)