Speciality glass manufacturer Corning (NYSE:GLW), most famous in recent years for creating durable and scratch-resistant glass for use in touchscreen smart phones, announced Tuesday that it is deepening its strategic relationship with Samsung, the world's largest mobile-phone manufacturer. Upon this news, Corning shares jumped in after hours trading by more than 25%, to a two-year high of $19.31.

Corning will take control over an existing joint venture between the two that manufactures glass in South Korea. That deal could be worth billions in cash flow and gives Corning immediate access to $1.2 billion on the joint venture's balance sheet. Samsung Display will also be making a major investment of up to $2.3 billion in Corning, which result in Samsung's ownership of approximately 7% of Corning. To offset the effect of new shares issued to Samsung, Corning's board of directors also approved a $2 billion share repurchase plan through 2015, all of which made investors happy enough to bid up Corning shares.

The joint venture, Samsung Corning Precision, was set up in South Korea in 1995 to focus on producing liquid crystal displays for the regional market. Corning and Samsung believe that by having Corning take complete control of the venture, with full access to Corning expertise and intellectual property, it can be transformed to serve a global market with any of Corning's portfolio of glass products.

Corning also believe it can take advantage of complementary manufacturing processes. CEO Wendell Weeks told investors that "synergies from integrating our worldwide fusion glass assets," as well as cash flow from consolidating control over the joint venture, would drive an additional 20% in earnings growth per share in 2014 and 2015. Weeks anticipates the deal will yield $2 billion in annual revenue, $500 million in cash flow, and $350 million in profits, before special charges related to the deal.

For Corning, which has seen earnings slump over the past few years, the deal could be a catalyst for new growth in the electronics display market, which accounts for more than 40% of the company's sales, and will account for even more following this deal. Better exposure to the Asia-Pacific region will help the company diversify away from the American market and toward a faster-growing consumer base in Asia.

Corning's commitment to research and development has given the company technological leadership in the high-growth consumer electronics display market, and this new deal will provide the opportunity to gain revenue in new markets while controlling production costs and capital expenditures. Even after Tuesday night's incredible 25% run-up, the stock has been so undervalued over the past year that it still looks attractive. At $19.30 per share, the stock is valued at only about 14 times forward earnings, cheaper than the overall market as measured by the S&P 500's average price to earnings ratio of 17. To me, that looks very attractive for a company with the pedigree, technological expertise, and growth opportunities of Corning.