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Samsung SDS Tries to Foray into US by Investing in Joint Venture with Chinese Company
Logistics BPO Biz in the US
Samsung SDS Tries to Foray into US by Investing in Joint Venture with Chinese Company
  • By lsh
  • February 27, 2018, 00:45
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Samsung SDS and China-based Shenzhen KYJ E Commerce made but stopped a discussion about a set-up of joint venture for business processing outsourcing (BPO) in Delaware of the US.
Samsung SDS and China-based Shenzhen KYJ E Commerce made but stopped a discussion about a set-up of joint venture for business processing outsourcing (BPO) in Delaware of the US.

 

According to some local news outlets on February 26, Samsung SDS and China-based Shenzhen KYJ E Commerce will invest in a joint venture company (JVC) for business processing outsourcing (BPO) in Delaware of the US.

They will use a method through which Samsung SDS will reportedly hold a 51-percent stake to exercise the right to the management of the joint venture company while the Chinese side will own a 49% stake. Samsung SDS and the Chinese side finalized negotiations, and now they are only before completing administrative procedures such as reporting it to government ministries in Korea, so it is forecast that all processes will be finalized as early as next month.

Logistics Blockchain technology is a new business item that Samsung Electronics vice chairman Lee Jae-yong has shown strong enthusiasm since 2014. Some experts say that this is the reason why this project is the first overseas business of other affiliates except for Samsung Electronics since Lee’s release from prison.

Even though Samsung SDS invested in the logistics BPO business as a future growth engine, but it has become a stumbling block that the logistics BPO business has relied on its sister companies such as Samsung Electronics. Some experts predict that the expansion of external business will determine whether Samsung SDS's BPO business will be successful or not. In particular, the BPO business will play a key role in Samsung SDS’s division of business for the reorganization of the Samsung Group’s corporate governance structure. "Samsung SDS has about 2.9 trillion won (US$2.6 billion) in cash assets at its disposal," said Jung Dae-ro, a researcher at Mirae Asset Daewoo. “Making M&A deals actively will lead to a rise in the corporate value of Samsung SDS.”

A representative from Samsung SDS, however, said that it is true that the company discussed with KYJ E Commerce just as part of ongoing logistics BPO businesses, but now stopped the discussions, adding the deal also did not involve blockchain technology.