Removes Underperforming Subsidiaries
Samsung Electronics reduced the number of its subsidiaries by 13 in 2021. This is the largest drop in the past five years since 2017 when the company reduced the figure by 18 after acquiring Harman, an automotive electronics and audio company, in 2016. Analysts say that Samsung Electronics has liquidated or sold off underperforming subsidiaries before pushing for large M&A deals.
According to Samsung Electronics’ 2021 audit report released on Feb. 22, the company currently had 228 subsidiaries at the end of 2021. The figure is down by 13 (5.2 percent) from 241 at the end of 2020. Its subsidiaries have been on the decline after peaking at 270 in 2017.
While liquidating underperforming subsidiaries, the company has included new firms in its list of subsidiaries. They include Samsung Venture Investment Capital (SVIC) Nos. 52, 55 and 56, which are funds created by Samsung Electronics to invest in venture companies with new technologies.
On the other hand, Viv Labs, an artificial intelligence (AI) platform company in Silicon Valley, and Prismview, an LED company in the United States, were excluded from its subsidiaries through mergers. Samsung Electronics liquidated Stellus Technologies, which manufactures and sells semiconductor storage (storage) systems for servers, and Sigmast Communications, a developer of rich communication service (RCS), which is considered a next generation text message standard. It also closed down next-generation network traffic and service quality analysis solution company ZiiLabs and Harman Connected service, a subsidiary of Harman, in 2021. All of Samsung Display’s LCD plant in Suzhou, China, was sold off in early 2021 and excluded from its subsidiaries.
Industry experts believe that Samsung Electronics is likely to shut down underperforming subsidiaries and start to seek large-scale M&A deals by utilizing its current cashable assets.