Samsung back on MandA market

By Kim Yoo-chul

Tech giant Samsung is approaching ``untouched territories’’ for further corporate expansion by more actively seeking acquisitions in non-memory businesses.

As previous such attempts failed to yield positive results, Samsung had been passive for a period, according to Samsung officials.

In 2008, the Suwon, Gyeonggi Province-based Samsung, which has made no major acquisitions in its 41-year-old history, dropped an unsolicited $5.9 billion offer for the U.S.-based flash memory card maker SanDisk and the withdrawal was deemed the end of Samsung’s ambition.

Having since recovered, Samsung is returning to international M&A markets with a smaller appetite.

On Wednesday, Samsung said it has acquired the U.S.-based healthcare equipment maker Nexus, the first since gaining a local medical equipment maker last year.

``We can’t unveil the deal amount, however, it’s true Samsung bought the American equipment maker,’’ said Lee Seung-jun, a spokesman for Samsung Electronics.

A senior Samsung executive, who declined to be identified, also said Samsung Electronics is eyeing more than 20 companies as acquisition targets in areas ranging from healthcare to non-memory.

Samsung’s Lee said the latest acquisition expects to raise its profile in the lucrative healthcare segment and to create more revenue from the ``next business.’’ Lee confirmed that Samsung’s top decision-makers have been focusing more on the healthcare sector.

Samsung is the world’s biggest memory chipmaker, while also leading the global flat-screen television market. But Samsung is currently a second-tier firm in home appliances, in general, and had stayed away from medical drugs and healthcare.

Based in San Diego, California, Nexus is a division of ITC Nexus Holding Company and makes cardiac-testing systems that help to monitor various cardiovascular diseases.

``This partnership will play a vital role in helping Samsung position itself as a global leader in healthcare technology,’’ Samsung said.

But Samsung’s Lee declined to comment on future acquisition plans.

Previously, Samsung’s acquisition deal for a local medical equipment firm Medison was for $292.2 million. It also bought the Netherlands-based display tech company Liquavista producing next-generation displays for electronic book readers and mobile devices, for an undisclosed sum.

Samsung plans to invest 1.2 trillion won or some $1.1 billion by 2020 in healthcare equipment.

Non-memory

Flexing muscles elsewhere, Samsung is planning to double the number employees working in its non-memory factories.

Unlike the volatile and cyclical memory chip business, vulnerable to macro-economic moves, the non-memory industry is regarded as safer and profitable ones as non-memory chips are being used to control an entire computing system.

Samsung is ramping up its production of mobile application processors (AP), which is a variant of the non-memory chip, for its clients including Apple, Nokia, Hewlett-Packard (HP) and other tech companies.

``Samsung will hire some 500 personnel for the non-memory area next year, from 230 this year. The non-memory business is one of Samsung’s next growth engines,’’ said an executive from Samsung’s semiconductor division.

The executive also claimed that Samsung’s aim to nurture non-memory businesses explains why the change of heart regarding SanDisk.

Samsung is ogling several companies for acquisitions but the executive wasn’t going to say.

The world’s top memory chipmaker plans to invest a record 8 trillion won entirely in non-memories, next year.

Revenue from the segment for this year is expected to exceed 10 trillion won for the first time since Samsung jumped in and of that,

``We forecast to create 7.5 trillion won revenue for this year by only selling mobile APs used in high-end digital devices such as smartphones, camcorders and tablets,’’ said the executive.

Shares of Samsung Electronics fell by 2.11 percent to end at 975,000 won per share on the nation’s main bourse, Wednesday.