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M&As

Samsung Elec draws attention with $92 bn in idle cash

Dec 31, 2020 (Gmt+09:00)

Samsung Electronics headquarters in Seoul
Samsung Electronics headquarters in Seoul

Samsung Electronics Co., sitting on a cash pile of 100 trillion won ($92 billion), has been absent in global M&A markets over the past few years since its $8 billion acquisition of Harman, a US electronics systems maker for automobiles, in 2016.

Its recent leadership reshuffle is now spawning market speculation that the world's top memory chipmaker might tap into its huge cash reserves to pursue aggressive M&A deals next year, as it aims to become the top player in the non-memory foundry market.

Earlier this month, Samsung promoted relatively young executives, in their 50s, to lead its memory and foundry businesses. The reshuffle reflects Samsung’s urgency to stay ahead of global rivals in the increasingly competitive semiconductor industry.

Analysts said Samsung’s new foundry chief Choi Si-young will be asked to further narrow the gap with sector leader Taiwan Semiconductor Manufacturing Co. (TSMC) in coming years.

BUSINESS SUPPORT TASK FORCE

The company’s Business Support Task Force, launched in 2017, is known as being responsible for large M&A deals as a control tower of the tech heavyweight. Smaller acquisition deals are handled by the planning team under the Management Support Office.  

Within the Business Support Task Force led by President Chung Hyun-ho, Executive Vice President James (Joonghyun) Ahn is key as head of corporate M&A and new business development. Back in 2004, Ahn handled the LCD joint venture launch with Sony Corp. Born in 1963, he graduated from Korea University’s electronic engineering department and received an MBA from KAIST. He joined Samsung Electronics in 1986. 

In 2015, Ahn moved to the Samsung Group’s Future Strategy Office, which is in charge of M&As. He handled the Harman acquisition and the group’s sale of its defense and chemical businesses to two other Korean conglomerates – the Hanwha and Lotte groups.

Two vice presidents of the Business Support Task Force – Hyung-min Yeo and Jachun (Andrew) Koo – are likely to work with Ahn on major M&A deals.

Koo, with a doctorate in computer engineering from Northwestern University, joined the task force this year. Born in 1981, he worked as an application processor researcher at Samsung Electronics before moving to Bain & Co. Last year, he was hired back by Samsung.

MANAGEMENT SUPPORT OFFICE

The chip giant’s Management Support Office has been led by Choi Yoon-ho, who was appointed as president and CFO in January 2020. In the Office, Kim Jae-yoon, executive director, is heading the planning team in charge of M&A deals.

The M&A industry is also paying attention to Yoon Juno, vice president, who returned to the Management Support Office recently. He was promoted as head of M&As in Samsung’s corporate strategy division under the office. Yoon is tipped to focus on non-semiconductor M&A deals in sectors including mobile, home appliances, visual display, networks and health & medical equipment. Back in 2017, he spearheaded Samsung Electronics’ printer business sale to HP.

Vice President Lee Seung-yuk, born in 1967, moved to the electronics systems team as head this month. In 2015, he belonged to the Future Strategy Office and worked with James Ahn on the Samsung-Hanwha deal, in which the electronics giant sold its defense business to the latter. Lee graduated from the University of Akron in Ohio. When he was promoted as a vice president last year, he was the youngest among the newly appointed executives.

In the Devices Solutions division, Executive Director Hur Suk takes responsibility for M&As.

Mathieu Apotheker, vice president, leads the Corporate Development Group. He joined Samsung Electronics in 2010 and was promoted to the current post in January 2020 at the age of 38. He specializes in M&As and overseas investments.

Meanwhile, SK Networks Co. is also in the limelight after it built up a cash pile of 1.3 trillion won in 2020 by shedding non-core businesses, including gas stations. The SK Group unit is expected to spend the cash to boost its rental business to create synergy with SK Rent A Car Co. and SK Magic Co., a water purifier rental company.

Write to Jun-ho Cha at chacha@hankyung.com

Yeonhee Kim edited this article.

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