Samsung Electronics is to sell the holding stake in its security division, Samsung Techwin, to South Korean conglomerate Hanwha Group.  

According to a statement, Samsung will sell more than 13.5 million shares of Samsung Techwin to Hanwha Group for 661 billion won ($US596 million). The company said that the funds from the sale would be used for investments in new businesses and to strengthen its core competencies. With the acquisition, Hanwha Group now owns a 32.4 percent stake in Samsung Techwin. 

As well as the CCTV business, Samsung is selling multiple divisions to Hanwha Group, as part of an overall deal worth more than $US1.7 billion. The agreement will result in the controlling shareholders of Samsung Techwin, including Samsung Electronics, Samsung C&T and other Samsung Group affiliates, selling their holding stakes in Samsung Techwin and Samsung General Chemicals to Hanwha for about $1.7 billion. The transaction is expected to be completed during the first half of 2015 and is subject to approval from antitrust regulatory authorities.

Samsung is comprised of dozens of units including Samsung Electronics, the world’s leading provider of mobile phones and TVs, which earn a collective revenue equal to around 20 per cent of South Korea’s annual economic output, according to news reports.

The family-run group currently chaired by Lee Kun-Hee has merged, broken out or newly listed some of its key units in recent years as he prepares to hand over control to his son, J.Y. Lee. The sell-off indicates a desire to streamline Samsung so as to concentrate on its key profit-making units, Kim Ji-San, analyst at Seoul-based Kium Securities, said via Tech2.com.

“The deal shows Samsung is determined to shed non-core units deemed not competitive enough globally and to focus on key businesses like electronics, finances, construction and engineering,” Kim said.

Hanwha Group's investment in Samsung Techwin will provide continued focus on the technologies and markets we serve, Samsung Techwin America President Soon Hong Ahn said in a statement. 

“Most important is that our Samsung brand will remain intact and this partnership will be otherwise transparent and seamless, as management and all operations at Samsung Techwin will remain the same with no significant changes in the foreseeable future,” said Soon.

In a statement, Jong Wan Lim, managing director of the professional security division of Samsung Techwin Europe, said the Hanwha Group’s investment would enable the company to continue innovating “market leading solutions that will create new business opportunities and ensure our future growth.”

“Customers can be assured that it is business as usual and that there will be absolutely no disruption to the supply of products or to the normal high levels of pre- and post-sales support that customers have come to expect from Samsung Techwin,” said Lim. 

Hanwha Corporation, the parent company of Hanwha Group, was founded in 1952 and consists of 4 major business units including defense, explosives, trade and machinery. In a statement, Hanwah Group says it plans to focus on advancing next-generation defense technology being developed by Samsung Techwin, but doesn’t specifically mention any plans as it relates to the commercial security or video surveillance sector. In 2013, Hanwha Group reported total revenue of more than $35 billion, while its assets were valued at approximately $117.4 billion.♦