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Samsung to merge camera unit

Samsung to merge camera unit

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Published : 2010-03-30 13:28
Updated : 2010-03-30 13:28

Samsung Electronics said yesterday that it is considering absorbing its camera-making unit Samsung Digital Imaging. The announcement pushed up the shares of the affiliate by 14.92 percent at yesterday`s close.
The move came as Samsung Electronics, the No. 1 TV maker and the No. 2 handset maker, seeks to boost its camera business, aiming for No. 1 spot in the market by 2012. Last year Samsung ranked third in the digital camera market with a 10 percent share. Canon topped with a 49 percent share, followed by Sony with a 28 percent share.
The electronics giant`s move is also an attempt to create synergy by combining its camcorder and printer businesses with Samsung Digital Imaging`s camera business, analysts said.
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"From my viewpoint, Samsung sees Canon as its role model," S.R. Kwon, an analyst at Hana Daetoo Securities, said, noting Canon, the world`s top maker of digital cameras, also sells printers and camcorders.
"A merger will speed up the decision-making process of Samsung`s camera business," Kwon said.
Samsung Digital Imaging currently develops and manufactures cameras, which are sold, distributed and marketed by Samsung Electronics, the world`s top maker of TVs and No. 2 maker of handsets.
"The two companies formally operate separately but are in fact of the same corporate entity," he said.
In July, Samsung moved its camcorder production line in Tianjin, China to Samsung Digital Imaging`s camera factory in the same region in a move seen by market watchers to integrate its camcorder and camera businesses.
"We are considering a merger and other ways to enhance cooperation with Samsung Digital Imaging, but nothing has been decided," Samsung said in a regulatory filing yesterday. The filing came after a report in Maeil Business Newspaper that Samsung may merge with its camera unit.
Samsung Electronics plans to launch a task force team for the merger early October and absorb the unit on Jan.1 2010, MondayToday reported yesterday, citing a key official of Samsung Digital Imaging.
Samsung was listed on the KOSPI on March 10 after being spun off from Samsung Techwin on Feb. 1. Since the listing, Samsung Imaging shares jumped by nearly seven-fold as of early June before plunging by a half from its peak.
The surge of Samsung Digital Imaging shares will raise merger costs of Samsung Electronics, analysts said.
"It is not good for Samsung. Samsung may feel unpleased with the news," Kwon said. The shares of Samsung Electronics edged up 0.13 percent while the broader market slipped 0.93 percent.

By Jin Hyun-joo

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