Exec: Stock sale won’t impact Samsung Techwin brand, company operations

Dec. 9, 2014
Company officials look to clear up some recent confusion related to Hanwha Group transaction

In an effort to dispel some misconceptions that had been circulating within the industry regarding last month’s sale of majority stock ownership of Samsung Techwin to South Korean conglomerate Hanwha Group, several members of the company’s senior leadership team for North America held a press conference with the media on Monday to clarify what the sale will really mean for the company moving forward.

Thomas Cook, vice president of sales for North America at Samsung Techwin, emphasized, first and foremost, that all of the company’s products will retain the Samsung brand.

“Samsung Techwin will continue to provide product under the Samsung branding. This is a key negotiation point with Hanwha and Samsung, so that won’t change at all as far as the industry sees it,” said Cook. “This is basically an umbrella changing stock transaction. As far as the partnership with Samsung Electronics, we will continue our partnership with Samsung Electronics in technology from the standpoint of working together on joint projects including marketing and sales.”

Late last month, Samsung Electronics announced that it had entered into an agreement to sell 3.5 million shares of Samsung Techwin to Hanwha Group for 661 billion won ($596 million). With the acquisition, Hanwha Group now owns a 32.4 percent stake in Samsung Techwin.

“The transaction of shares just goes through in writing. The negotiation for these other pieces, such as the branding, takes place throughout the transaction,” explained Cook.

Cook added that previous media reports that Samsung Techwin would be dropping the Samsung brand as a result of this sell are false.

“We’ve always been Samsung Techwin, which is a publicly traded company separate from Samsung Electronics,” he said. “All of our R&D, all of our manufacturing is done under Samsung Techwin facilities. That won’t change. Again, Hanwha Group is investing in the 32 percent share that it is acquiring from Samsung Holding Group, so it is more of a financial transaction, but they don’t have the manufacturing facilities of security video products or anything like that that they would be combining or anything.”  

In a statement, Samsung Electronics said funds from the sale of the Samsung Techwin shares and some of its other holdings would be used for investments in new businesses and to strengthen its core competencies. However, Cook said that the parent company’s decision to sell its controlling stake in Samsung Techwin was not because it wasn’t willing to invest in the resources necessary to continue to keep the company among the leaders in the video surveillance space.

“Hanwha wanted to increase their ability for defense and security products, so the interest came from them to acquire the stock regarding Samsung Techwin and some other affiliates for that matter,” said Cook.

In a statement, Hanwha Group said it plans to focus on advancing next-generation defense technology being developed by Samsung Techwin.

“Samsung Techwin is divided up into multiple divisions – defense, machinery, building automation and security. Hanwha Group is looking to invest and grow all of those divisions, more so the defense as mentioned in some articles, but security is a critical part of the defense technologies,” said Cook. “Many of our core competencies are taken from our security division and brought into military and vice versa. The technologies are shared and we see that Hanwha Group is looking to invest even more so to advance these businesses.”   

According to Jon Cropley, principal analyst for video surveillance and security services at IHS, Samsung Techwin has grown rapidly over the last decade and was estimated to be the fifth largest supplier of video surveillance equipment globally in 2013. Despite their success, however, Cropley said that 2013 was a rough year for the company as they didn’t manage to gain market share.  

Although he couldn’t speak for the company’s performance globally, Cook said that Samsung Techwin has achieved substantial growth in the North American market recently.

“Our growth has been phenomenal over the last two-and-a-half to three years – about 40 percent last year and about 70 percent from last year to this year – so we’ve seen tremendous growth,” added Cook. “We will continue to invest as we have in the past. We’re adding 10 to 15 new employees, most of them in the sales arena… and we’ll continue to market ourselves aggressively.”

Cook said that while Hanwha Group will undoubtedly have a say in the company’s strategy and investments moving forward, at the same time, they wouldn’t have acquired a stake in Samsung Techwin if they didn’t want to grow the business.

“Obviously when news comes out about (transactions like this), human nature is to become nervous and say, ‘what is happening, what is going on?’ Our sales people, integrators, customers and end users have all been contacted on an ongoing basis over the past two weeks to make sure they understand our commitment and that the branding will continue,” said Cook.      

About the Author

Joel Griffin | Editor-in-Chief, SecurityInfoWatch.com

Joel Griffin is the Editor-in-Chief of SecurityInfoWatch.com, a business-to-business news website published by Endeavor Business Media that covers all aspects of the physical security industry. Joel has covered the security industry since May 2008 when he first joined the site as assistant editor. Prior to SecurityInfoWatch, Joel worked as a staff reporter for two years at the Newton Citizen, a daily newspaper located in the suburban Atlanta city of Covington, Ga. 

(Image courtesy Wikimedia Commons/High Contrast)
Samsung announced last week that it has agreed to sell its controlling stake in Samsung Techwin to Hanwha Group.