It's not uncommon for companies that have deep pockets to fuel growth through mergers and acquisitions. Samsung is certainly one with deep pockets as its cash reserves are in excess of $60 billion. However, the company has been out of the M&A market since 2017 when it acquired Harman for $8 billion.
That might change now that the legal troubles of Samsung Chairman Lee Jae Yong are over. Analysts expect that with Lee finally being free of the shackles of his legal troubles, he'll now actively seek more mergers and acquisitions to renew growth.
Samsung's sitting on over $60 billion in cash
Samsung Chairman Lee Jae-yong was implicated in a high profile case stemming from the controversial 2015 merger of Cheil Industries and Samsung C&T. He was cleared of the charges against him earlier this week.
Lee was involved in various legal cases since 2016 and Samsung maintained a low profile in the M&A space during his absence. It's reported that Samsung employees view this period as the “lost decade,” as a sense of crisis emerged in many Samsung group affiliates. The conglomerate couldn't make any major decisions about buying new companies without Lee at the helm.
With the legal troubles over, Lee is now expected to reinvigorate the management of Samsung's growth businesses with a particular focus on AI, biotechnology, robots, and telecommunications equipment. Industry watchers now expected that Lee will take a more decisive role in Samsung's mission to regain dominance in flagging businesses, including semiconductor, mobile, and display.
This may also involve utilizing some of that $60 billion to buy new companies that can spur growth for Samsung's various businesses. However, it remains to be seen if Samsung will find it easy to buy new companies as mounting geopolitical and regulatory uncertainties have made M&As challenging.
