GE looking at Korean firms for M&A
General Electric (GE) is looking at Korean companies for a possible acquisition deal aimed at bolstering its presence here, according to the new CEO of GE Korea.
``We aren’t ruling out the possibility of expanding our business in Korea via various acquisition deals. I am controlling a special unit inside GE Korea that handles investment, acquisition and joint-venture related issues,’’ CEO Khang Sung-wook told reporters at a news conference in Seoul, Wednesday.
Khang declined to unveil the names of the companies that he is looking at. But officials say some healthcare-related companies could be targets as the executive stressed that GE Korea will put more focus on healthcare-related businesses.
The remarks come after GE Healthcare signed an agreement to acquire Xcellerex. The latest deal will help GE expand its healthcare products and services for the manufacturing of biopharmaceuticals such as recombinant proteins, antibodies and vaccines.
GE had earlier been involved in various healthcare-related projects with Samsung Electronics. Now, the new GE Korea head is positive on collaborating with Samsung again.
``GE Korea is also seeking balanced growth with Korean companies. GE is always open to activate strategic partnerships with Korean companies,’’ Khang told reporters.
He admitted that GE has stronger intent to reach out to information technology sectors and said the promotion was a ``strategic decision’’ by GE Chairman and CEO Jeff Immelt.
``The request by Immelt is simple. GE should be a strong firm with top-tier competiveness in software. Its main products are for use in industrial purposes not for consumers. But we will provide better software to control systems that we sell,’’ said Khang.
Localization is another top word for Khang this year. GE Korea is planning to allocate more budget to increase its charity projects.
``We have many plans and I believe the number of such corporate social responsibility (CSR) programs should be increased.’’
As part of the initiative, GE Korea said it will take on 100 new hires annually for the next few years. ``We will support various GE-led leadership programs by partnering with local universities,’’ said Khang.
Understandably, GE said it welcomes the free trade agreement (FTA) between South Korea and the United States, which will take effect from midnight Wednesday and the pact will help GE Korea.
``GE Korea could save $150 million on tariffs for the next five years thanks to the materialization of the pact. With the money saved, the firm will procure more parts in Korea. The FTA will help spur our balanced growth with Korean companies’ initiative,’’ said Khang.
With the pact, tariffs on a whopping 82.1 percent of goods imported from the United States will be immediately removed, while fractionally fewer, or 80.5 percent, of the products that Korea ships to the United States will have their tariffs waived.
GE imports components from the United States.
``This will make the lion’s share of Korean goods in the United States significantly more price competitive, helping Korean businesses increase their share of the market there,’’ said the GE Korea head.