Samsung is investing in hardware after the company agreed to spend 53 billion won ($48 million) to acquire a 10 percent stake in fellow South Korean firm Pantech, the country’s third-largest maker of mobile devices.
The company announced — via Yonhap News Agency – that the deal will “help further solidify” its relationship with Pantech, and in particular their joint work around smartphones, tablets and other areas of hardware.
Update: Samsung has confirmed the deal, providing a statement to TNW that explains it will be a passive investor with no input into Pantech’s management decisions — presumably to offset any anti-competitive concerns:
Samsung Electronics has agreed to acquire a 10-percent stake in Pantech, valued at approximately KRW 53 billion. The investment is aimed at solidifying our relationship with Pantech, a key component customer of Samsung. Samsung will have no involvement in Pantech’s business management in any way or form.
The duo already work together on semiconductor and display businesses, and, last year alone, Pantech is reported to have spent 235 billion won (around $211 million) buying electronics and components from Samsung affiliated businesses to order to build its devices.
The deal is quite unique in a sense, because devices from Pantech compete with Samsung’s range of smartphones and tablets, and it isn’t often that rival companies would collaborate in an investment deal such as this.
While the Pantech name is strong in Korea, where its sales trail only local rivals Samsung and LG, the firm has not tasted similar success overseas. At this year’s Mobile World Congress event, however, it caught the attention of media with the Android-based Vega No 6, the world’s largest full-HD smartphone, while its budget range — including the Discover, available for $50 on contract in the US — has garnered positive reviews.
Like other once strong electronics firms in East Asia, including most notably Sharp — in which Samsung is also an investor — Pantech has suffered financial issues of late. Last year, a five-year refinancing program was set up to managing its fiscal development, and Samsung’s investment will aid that.
With the deal, the world’s largest becomes Pantech’s third-largest shareholder, behind only chip-maker Qualcomm (11.96 percent) and the Korea Development Bank, which owns 11.81 percent.
The Pantech agreement follows Samsung’s decision to invest in Sharp in March. The firm agreed to spend 10.4 billion yen (around $112 million) for a 3.08 percent stake in Sharp, which will also grant it greater access to its technology.
Headline image via Jung Yeon Je / Getty Images
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