HANOI/SEOUL -- Samsung SDS, a system developer unit of Samsung Electronics, plans to buy a 25% stake in Vietnam's No. 2 tech company CMC for an undisclosed amount.
The deal, announced on July 26, is estimated to be worth about 50 billion won ($41.1 million), according to South Korean media reports. A source at CMC told the Nikkei Asian Review that Samsung's investment amounted to "not less than 750 billion dong ($32.3 million)," making it one of the largest investments in a Vietnamese IT-related company by a foreign business, according to Vietnamese media reports.
CMC will accept representatives from Samsung SDS on its board of directors, CMC said in the press release. CMC declined to detail the exact number of board members joining from Samsung SDS.
The two companies will work together in areas including artificial intelligence, the internet of things, cloud computing and information security. CMC will use investment from Samsung to expand business across Southeast Asia.
The cooperation between Samsung SDS and CMC dates back to 2016. Samsung SDS said it expected the investment to pave the way for the expansion of its presence in the Vietnamese market, by combining its technology and solutions with CMC's IT infrastructure and sales channels. The company is looking beyond Vietnam and hoping to accelerate its business across the Southeast Asian market.
"In cooperation with CMC, we will expand our digital transfer business for customers in the Vietnamese and global markets," said Samsung SDS CEO Hong Won-pyo in a statement. Samsung did not unveil the deal price, but one local media outlet estimated it to be about 50 billion won based on CMC's stock price.
Hanoi based CMC Technology Group focuses on IT solutions and telecommunication-related services. In the 2018 fiscal year, its accumulated revenue reached 6 trillion dong, while pretax profit was about 300 billion dong, according to the company.
Samsung operates two huge smartphone factories in northern Vietnam, producing more than 150 million units a year, and an appliance factory in the southern part of the country. The company has a great presence in Vietnam, with its products making up for about 25% of the country's total exports.