Samsung Electronics Mulls a Merger with Samsung Medison | Be Korea-savvy

Samsung Electronics Mulls a Merger with Samsung Medison


Medical equipment manufacturing is one of the five top-priority business areas that the company will invest 23 trillion won until the year 2020. (image:Samsung Electronics)

SEOUL, Sep. 3 (Korea Bizwire) – Samsung Electronics is reviewing an idea of merging Samsung Medison, an unlisted medical equipment maker. In a regulatory filing on September 2, Samsung Electronics said, “We are currently considering whether to pushing forward with a merger with Samsung Medison. We will disclose later as soon as detailed decisions are made.”

The electronic giant is strengthening its medical business. Medical equipment manufacturing is one of the five top-priority business areas that the company will invest 23 trillion won until the year 2020, including solar cell, electric car motor, LED devices, bio-pharmaceutical, and medical equipment.

Given the group is undertaking a major restructuring effort since late last year, including the pairing of companies such as Samsung SDI-Cheil Industries, Samsung SDS-Samsung SNS, Samsung General Chemicals-Samsung Petrochemical, and Samsung Heavy Industries-Samsung Engineering. For this reason, most analysts see the absorption of Samsung Medison by Samsung Electronics is just a matter of time.

Samsung Electronics had acquired Samsung Medison in 2011, with the promotion of the medical equipment team to the medical equipment division at the end of 2012. Currently Samsung Electronics holds a 68.45-percent stake in the medical equipment unit. Before moving under the umbrella of Samsung Group, Samsung Medison used to make low-cost ultrasonography machines. After the acquisition, it has expanded the business area toward premium ultrasound machines and equipment used by radiologists.

The first-half performance of Samsung Medison was 139.1 billion won in sales revenue and 1.7 billion won in operating profit, falling short of the earlier expectations of the parent company when it was acquired. Instead of remaining as a subsidiary, becoming an integral part of the company is more beneficial for Samsung Medison as it will be able to receive more support in the form of R&D funds from the parent company.

By Sean Chung (schung10@koreabizwire.com)

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