김대종 세종대 교수__The KoreaTimes__Samsung urged to find breakthrough via M&As

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By Baek Byung-yeul

Lee Jae-yong, vice chairman of Samsung Electronics

Samsung Electronics should make more efforts to find new growth engines, likely through mergers and acquisitions (M&As), as its current cash cows ― memory chips, TVs and smartphones ― are facing increasing competition from global rivals, according to industry experts, Friday.They said the share price of Korea's top company has remained lackluster in recent months, despite its record-breaking performances, because it has failed to show investors what its future will look like, stressing that it needs to find a breakthrough by actively seeking to take over companies with strong future growth prospects to further widen its lead on competitors."Although Samsung is the world's No.1 player in the memory chip field, its growth in the non-memory sector is still far from investors' expectation, remaining second with around a 17 percent market share while leader TSMC takes around a 60 percent share," said Kim Dae-jong, a professor of business administration at Sejong University."Of course, there are many reasons for this, but being not active in M&As could be one. Large companies like Samsung should have acquired companies with high potential to increase their growth, as we already seen in previous cases such as Google's acquisition of YouTube."Samsung has not conducted any major M&A deals since it acquired U.S.-based connected car and audio system company Harman in 2016 for $8 billion.Though Samsung Vice Chairman Han Jong-hee said during the Consumer Electronics Show in Las Vegas in January, "We are reviewing M&A opportunities in various sectors," the company hasn't provided investors any kind of clues about it during Thursday's conference call.The Sejong University professor pointed out that one of the reasons why Samsung has been sluggish in M&As is that its chief has been unable to get involved in management decisions."For Korean conglomerates, the role of corporate leaders is very important especially when it comes to making a decision about conducting large-scale M&As. Samsung's leader Lee Jae-yong is currently embroiled in legal issues, so there is no one who can make a risk-taking decision," Kim said.Lee Jae-yong, vice chairman of Samsung and son of the late Samsung Chairman Lee Kun-hee, is not allowed to return to management until 2027 due to a five-year ban imposed by the Ministry of Justice. Lee was convicted of offering bribes to former President Park Geun-hye and has been on parole since August 2021.As a presidential pardon is the only way for Lee to legally lead the company again, business lobby groups including the Korea Chamber of Commerce and Industry, the Korea International Trade Association and an association of Samsung's collaborating vendors submitted pleas recently to the presidential office asking President Moon Jae-in to grand a full presidential pardon before he leaves office on May 9."There is a need for the government to grant a pardon to Lee's legal problems, which are intertwined with political logic. Since it is true that Samsung had problems with its governance structure, the conglomerate must be operated based on legal compliance and politicians should not interfere too much with businessmen," Kim said.In response to the growing calls for conducting M&As, Samsung hired semiconductor investment banker Marco Chisari recently, according to Bloomberg report.Given that Chisari, who has worked at Bank of America, is known as an expert in M&A activities in the semiconductor sector, the industry view is that Samsung is finally jumping back into the takeover race.A Samsung spokesman said that "there is nothing internally known about where he is joining, or in what position he will work, if he joins us."The tech giant announced its sales in the first quarter came in at 77.78 trillion won ($61.11 billion), up 18.95 percent from the same period last year, while operating profit reached 14.12 trillion won, increasing 50.5 percent year-on-year. But its business outlook is not that bright due to a series of unfavorable factors such as Russia's invasion of Ukraine and supply disruptions caused by the pandemic.

출처 : https://www.koreatimes.co.kr/www/tech/2022/05/419_328269.html

Samsung urged to find breakthrough via M&As