Business Expansion
According to sources in the mobile telecommunications industry on June 1, SK Telecom is going to submit a letter of intent that outlines its plan to buy Iriver to Vogo Fund in charge of the M&A deal on June 2. Iriver made a name for itself in the mid-2000s as the largest MP3 player maker in the country, before finding itself floundering in the market owing to the huge popularity of Apple’s iPod. As a result, it was sold to Vogo Fund in 2007. At that time, the private-equity fund purchased a 34.5 percent stake in the soon-to-be merged company for 60 billion won (US$58.6 million), but the current value of its stake does not approach 30 billion won (US$29.3 million).
The industry believes that SK Telecom appears to be the most preferred bidder for the deal because the company has unrivaled financial firepower, and is in an advantageous position to create synergy.
In particular, the transaction is significant in that Korea’s largest mobile carrier will be able to own an IT-related product manufacturer. Currently, Iriver produces portable audio equipment like MP3 players, low-cost smartphones, wearable devices, black boxes, intelligent robots, and an e-book reader called E-BooK. In the meantime, Vogo Fund is scheduled to end the bidding process on June 2, select a successful bidder, and finalize the sale of Iriver by July.