Samsung made a major decision: withdraw from the automotive business and terminate its 26 year cooperation with Renault


Tencent technology news according to foreign media reports, a few days after Samsung Electronics leader Li LIF was released from prison on parole, Samsung made a major decision: withdraw from the automotive business and end its 26 year automotive business cooperation with Renault.
In a regulatory document submitted to the Korean stock exchange (KRX) on Thursday, Samsung credit card company under SamSung group said it was preparing to sell its stake in the joint venture of Renault Samsung Motors.
The company said in the document: “Samsung credit card company is preparing to sell its 19.9% stake in Renault Samsung automobile joint venture. But other details, such as the type of equity sale and due process, have not been decided. ” Samsung credit card company is the second largest shareholder of Renault Samsung automobile joint venture.
According to local investment banking sources, Samsung credit card company has issued invitations to private equity funds (PEFS) and other financial investors at home and abroad.
Samsung credit card company decided not to renew the trademark contract expired last year with Renault. It is widely expected that Samsung will withdraw from the joint venture. The expiration of the contract means that Renault Samsung automobile joint venture will delete the word “Samsung” from the name of the joint venture after the two-year grace period up to September 2022. Previously, Renault Group paid Samsung 40 billion to 50 billion won a year.
Although Samsung credit card company announced the planned equity sale, the sale process may not be smooth because the financial situation and sustainability of Renault Samsung automobile joint venture are not very good. The company reported an operating loss of 79.6 billion won last year, the first such loss in eight years.
In addition, the company has launched a wide range of voluntary retirement plans for employees to save fixed costs in the event of declining sales and deteriorating profits. Renault Samsung automobile joint venture is the only automobile manufacturer in South Korea that has not yet completed negotiations with the trade union on employee welfare and wages.
Some people said that Samsung credit card company made this decision because it is pessimistic about the future sustainability of the joint venture against the background of the rapid transformation of the global automobile industry to electric vehicles. Given its limited product portfolio, Renault group, the largest shareholder of the joint venture, is unlikely to promote its possible initial public offering (IPO).
A source said, “the price will not be very high.” Samsung was involved in the automotive business as early as 1995. However, after the Asian financial crisis, Renault group gained a controlling stake in the joint venture. Since then, Samsung has only received dividends and trademark royalties, and has not participated in the management of the joint ventureļ¼ˆ Tencent Technology (reviser / Lexue)