Samsung To Buy 10% Stake In Pantech for $48 Million
Samsung has paid nearly $48 million USD for a 10% stake in one of its competitors, Pantech Corp. Pantech is the third-largest handset maker in South Korea behind Samsung and LG.
Pantech said in a statement Wednesday that it will sell 53 billion won (US$48 million) worth of new shares to Samsung. Samsung’s investment will help the company better finance its operations and attract more investor interest going forward, the statement said.
The deal, revealed by Yonhap News, makes Samsung the third-largest stakeholder in Pantech, and builds on an existing supply chain relationship which sees Pantech source more than $210m worth of components from Samsung’s manufacturing divisions each year.
While the move has raised concerns over potential anti-trust issues, Samsung was quick to release a statement that it will have “no involvement in Pantech’s business management in any way or form,” instead using the deal to strengthen ties between the two manufacturers.
Pantech has been struggling to make profits and maintain its market share amid stiff competition from crosstown rivals.The company said earlier this year it will focus on attracting investments and improving its financial status, as a means to boost its competitiveness.
The deal is aimed at giving the top global smartphone manufacturer easier access to Pantech’s semiconductor and display technology – something the two companies have traded between one another frequently in the past.
So as Apple relinquishes some of its reliance on Samsung’s chips, the Korean company is furthering its own interests in ensuring future self-reliance.
[Yonhap News, Fox News]