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Press Release
SK Telecom Forms A Strategic Alliance designed to Expand Global Business with Pantech & Curitel
2005.05.04 PrintSK Telecom will sell 60% (4,542,000 shares) of the total 89.1% (6,747,421 shares) SK Teletech shares it owns, at a KRW 66,050 per share selling price for a total of KRW 300 billion, to Pantech and Curitel.
The companies have agreed to jointly implement key business issues on a mutual win-win basis. Specifically, they will jointly conduct R&D activities regarding strategic handsets, jointly invest in R&D, and work together in supplying handset products bot
Pantech & Curitel have laid the groundwork for becoming one of the top five major global handset makers, supplying more than 30 million handsets a year.
In order to expand their presence in the global market, and reinforce their international competitiveness by realizing economies of scale, SK Telecom has decided to sell 60% of its SK Teletech shares out of the total of 89.1% shares owned by SK Telecom, to Pantech & Curitel. Furthermore, SK Telecom, Pantech & Curitel, jointly announced that they will strengthen close cooperative and strategic ties throughout their major business areas. This includes cooperation in advancing into overseas markets, joint implementation of research and development, and joint R&D on mobile handsets. They will also share all of their R%D capabilities.
The two companies held meetings of their Boards of Directors at the same time on May 3rd, and decided sell and purchase 60% (4,542,000 shares) SK Teletech shares out of the total 89.1% (6,747,421 shares) shares owned by SK Telecom at a KRW 66,050 per share selling price, for a total of KRW 300 billion. Following this transaction, Pantech & Curitel will become the majority shareholders of SK Teletech with a 60% shareholding, and will take over the management responsibility.
Through this alliance, the two companies agreed to jointly implement key business issues on a mutual win-win basis. Specifically, they will jointly conduct R&D activities regarding strategic handsets, jointly invest in R&D, and work together for supplying handset products. They also plan to cooperate in the advancement into overseas markets, including the U.S. mobile communications market, as well as extension of their global presences. Moreover, the two companies will increase the confidence in the market through their respective conventional business transactions with their business partners. These will lay a solid foundation for doubling their international competitiveness in handset markets, both at home and abroad.
To this end, SK Telecom will complete the transfer of SK Teletech’s management rights to Pantech & Curitel by the fist half of this year. They will also establish more specific approaches to strategic alliances. In the meantime, SK Telecom will remain as the second largest shareholder with a 29.1% shareholding in SK Teletech, and will be maintaining the appointment rights for one or two non-standing directors. Pantech & Curitel will secure the rights for the ’SKY’ brand name.
The companies also agreed to continue the employment of existing SK Teletech personnel, placing first priority on securing their social standing.
SK Telecom, the number one mobile communications operator in Korea, has been extending its presence in overseas markets such as the U.S. and China, and Pantech & Curitel has the world’s best level of R&D capabilities, as well as overseas marketing infrastructure. As these companies form strategic alliances, they will create an immense synergy effect by cutting R&D investment costs, and increasing profitability as well as handset sales in the global market.
With this transaction, Pantech & Curitel has laid the groundwork for becoming one of the top 5 major global handset makers, supplying more than 30 million handsets a year. This will lead to great changes in the worldwide business domain of the handset market.
Through this alliance with Pantech & Curitel’s strong presence in the global market and strong product base,
SK Telecom will not only be able to gain marketing differentiation through the timely supplying of strategic handsets, but will also be able to maintain SK Teletech’s strategic value to SK Telecom through the collaborations in global business. Also, SK Teletech is securing a sound foundation for continuous growth in the future by gains in the scale of resources and capabilities. Furthermore, SK Telecom will be able to extend overseas businesses, with minimized risk.
There is a frenzy of strategic alliances in the world’s handset market that involve attempts to secure price competitiveness through large-scale R&D investment strength, as well as cutting high-function component technological expertise procurement expenses through the purchase of large quantities of components. For instance, Sony and Ericsson established a joint venture company in 2001, and China’s TCL and Alcatel launched a joint venture company in 2004.
The two companies held meetings of their Boards of Directors at the same time on May 3rd, and decided sell and purchase 60% (4,542,000 shares) SK Teletech shares out of the total 89.1% (6,747,421 shares) shares owned by SK Telecom at a KRW 66,050 per share selling price, for a total of KRW 300 billion. Following this transaction, Pantech & Curitel will become the majority shareholders of SK Teletech with a 60% shareholding, and will take over the management responsibility.
Through this alliance, the two companies agreed to jointly implement key business issues on a mutual win-win basis. Specifically, they will jointly conduct R&D activities regarding strategic handsets, jointly invest in R&D, and work together for supplying handset products. They also plan to cooperate in the advancement into overseas markets, including the U.S. mobile communications market, as well as extension of their global presences. Moreover, the two companies will increase the confidence in the market through their respective conventional business transactions with their business partners. These will lay a solid foundation for doubling their international competitiveness in handset markets, both at home and abroad.
To this end, SK Telecom will complete the transfer of SK Teletech’s management rights to Pantech & Curitel by the fist half of this year. They will also establish more specific approaches to strategic alliances. In the meantime, SK Telecom will remain as the second largest shareholder with a 29.1% shareholding in SK Teletech, and will be maintaining the appointment rights for one or two non-standing directors. Pantech & Curitel will secure the rights for the ’SKY’ brand name.
The companies also agreed to continue the employment of existing SK Teletech personnel, placing first priority on securing their social standing.
SK Telecom, the number one mobile communications operator in Korea, has been extending its presence in overseas markets such as the U.S. and China, and Pantech & Curitel has the world’s best level of R&D capabilities, as well as overseas marketing infrastructure. As these companies form strategic alliances, they will create an immense synergy effect by cutting R&D investment costs, and increasing profitability as well as handset sales in the global market.
With this transaction, Pantech & Curitel has laid the groundwork for becoming one of the top 5 major global handset makers, supplying more than 30 million handsets a year. This will lead to great changes in the worldwide business domain of the handset market.
Through this alliance with Pantech & Curitel’s strong presence in the global market and strong product base,
SK Telecom will not only be able to gain marketing differentiation through the timely supplying of strategic handsets, but will also be able to maintain SK Teletech’s strategic value to SK Telecom through the collaborations in global business. Also, SK Teletech is securing a sound foundation for continuous growth in the future by gains in the scale of resources and capabilities. Furthermore, SK Telecom will be able to extend overseas businesses, with minimized risk.
There is a frenzy of strategic alliances in the world’s handset market that involve attempts to secure price competitiveness through large-scale R&D investment strength, as well as cutting high-function component technological expertise procurement expenses through the purchase of large quantities of components. For instance, Sony and Ericsson established a joint venture company in 2001, and China’s TCL and Alcatel launched a joint venture company in 2004.