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UPDATE 1-Samsung buys Medison in major push to healthcare

Published 12/13/2010, 10:24 PM
Updated 12/13/2010, 10:28 PM

* Deal marks Samsung's first major push into healthcare

* Agrees to buy 43.5 pct of top Korean ultrasonic device firm

* Shares up 0.3 pct at record high vs KOSPI's 0.3 pct rise (Adds details)

SEOUL, Dec 14 (Reuters) - Samsung Electronics Co Ltd said on Tuesday that it has agreed to buy a majority stake in South Korean medical equipment maker Medison, a deal reportedly worth more than 300 billion won ($262 million).

The purchase of a 43.5 percent stake in the country's top ultrasonic medical equipment suggests that cash-rich Samsung may be back on the acquisition trail to take on rivals such as General Electric Co by diversifying away from its core businesses of electronic components, mobile phone handsets and televisions.

Samsung, which has mainly focused on organic growth, has made no major acquisitions in its 41-year history. In 2008, the company dropped an unsolicited $5.9 billion offer for U.S. flash memory card maker SanDisk Corp.

"The ultrasound diagnostics device segment provides a logical entry point into the healthcare equipment market because of technological similarities and potential synergies with Samsung's existing consumer electronics, IT products and technologies," Samsung said in a statement.

By 0315 GMT, shares in Samsung, which have hit a record high this month, were up 0.5 percent at an all-time high, in line with the broader market's 0.3 percent gain.

"This is a very important decision that could lay the foundation for future growth potential," said Shinhan Investment Corp analyst John So. "With only its existing business portfolios, it could be difficult to sustain the current rate of growth. There are many areas in which Samsung can apply its chip and panel technologies to the healthcare equipment business."

Samsung beat out tobacco company KT&G Corp and SK Holdings Co Ltd in the auction held by private equity fund Consus Asset management.

South Korea's business conglomerates are making a big push toward healthcare and renewable energy in their search for new growth engines.

In May, Samsung said it aimed to invest 1.2 trillion won in the healthcare business by 2020 and to generate 10 trillion won in revenue. It unveiled a portable blood test kit in June, its first healthcare product.

Medison, which competes with GE, Philips Electronics, Siemens AG and Toshiba Corp, has a 6.7 percent share of the global ultrasonic devices market. ($1=1144.9 Won) (Reporting by Lee Chang-ho and Hyunjoo Jin, writing by Miyoung Kim; Editing by Chris Lewis)

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