Samsung to buy stake in smaller local rival Pantech

Samsung Electronics Co., the world's largest smartphone maker, said Wednesday that it has decided to buy a 10 percent stake in Pantech Corp., South Korea's third-largest handset maker The deal, valued at around 53 billion won (US$47.6 million), will help further solidify bilateral cooperation in smartphone and other business areas, it said. With the stake purchase, Samsung will emerge as Pantech's third-largest stake holder after the U.S. mobile chip manufacturer Qualcomm Inc. and state-run Korea Development Bank, which each owns 11.96 percent and 11.81 percent in the company. Samsung and Pantech have strong ties in semiconductor and display businesses. Last year, Pantech purchased electronic parts worth 235 billion won from Samsung's affiliates such as Samsung SDI. In February, Pantech said Qualcomm would jack up its stake by converting Pantech's royalty debts into equity. Qualcomm earlier had converted Pantech's royalty debts worth $75 million into equity, becoming the company's second-largest shareholder. Pantech was put under a debt rescheduling program worth 1.28 trillion won in 2007. Late last year, its creditors agreed to end the five-year debt workout program for the handset maker. In the domestic market, Pantech trails behind Samsung Electronics Co. and LG Electronics Inc. in mobile phone shipments.