Hewlett-Packard said it agreed to buy out Samsung Electronics' 45 percent share in Hewlett-Packard Korea, the two companies' 13-year-old joint venture.
The agreement was signed by Lewis E. Platt, HP (company
profile) chairman, president, and CEO, and Jong-Yong Yun, Samsung Electronics president and CEO, at HP's headquarters in Palo Alto, Calif. HP will pay $36 million, and Samsung said it will use this to improve its financial structure and cash flow.
Recently, the Samsung Group has secured $2.5 billion in foreign funds as part of its restructuring program. The company said it hopes to attract $5 billion in foreign investment by disposing of some of its subsidiaries or capital tie-ups with foreign business partners this year in an effort to improve its financial structure.
HP HWP and Samsung have worked together since 1977, founding the joint venture in 1984. HP Korea has 1,100 employees and had orders of more than $1 billion in its 1997 fiscal year. It ranked as Korea's 142nd largest company last year.
"For the past 20 years, we've established cooperative relationships with Samsung," said HP's Platt. "We agreed to support Samsung's efforts to attract foreign funds, and we hope this agreement will help it accomplish its restructuring goals."
Yun said it did. "We really appreciate HP's cooperation in our efforts to attract foreign funds," he said. "HP production facilities around the world have continuously purchased electronic parts and components such as PC monitors, memory chips, and LCDs from Samsung. This has certainly helped us contribute to export credit, especially during Korea's financially difficult times. Meanwhile, Samsung purchased HP's various products, ranging from computer products to medical equipment."
Platt, who met with Korean President Kim Dae-Jung in March, also announced HP will invest $250 million in Korea this year to demonstrate its commitment to the Korean market.