There has long been speculation about how Samsung would use its more than $60 billion cash reserves. The general perception is that the company would become active in the mergers and acquisitions space to buy some big company. However, Samsung hasn't made any major acquisitions since it bought Harman for $8 billion back in 2017.
It appears that Samsung is making some moves that may suggest it's preparing to make an acquisition. The company is reportedly bringing in cash from subsidiaries across the globe to South Korea, potentially to make large sums readily available for a deal.
Samsung's creating a war chest to pounce on acquisition opportunities
Samsung's lack of interest in the mergers and acquisitions space was largely due to the legal troubles of Samsung Chairman Lee Jae-yong. The company retained a low profile while he went in and out of prison. With his legal troubles effectively behind him, Lee's expected to take a more aggressive management approach that may see the company acquire targets in growth businesses like AI and semiconductors.
Korean media is reporting that Samsung is bringing billions of dollars in cash assets into its Korean headquarters likely in anticipation of a major acquisition. Samsung sold off its entire stake in Dutch semiconductor equipment giant ASML last year for a profit of nearly $4 billion.
Over the past year, the amount of cash and assets easily convertible to cash at the headquarters has increased by 169% over the previous period to $7.8 billion. Market analysts feel that Samsung is holding cash now to quickly make deals when favorable conditions apear.
Samsung's having to bring in cash because it holds the majority of its cash assets at overseas subsidiaries to maximize tax benefits. Over the past year, Samsung has started to bring in a larger amount of cash from these subsidiaries.
It's as yet unclear what companies Samsung might be interested in acquiring. Analysts feel that Samsung may have an eye on AI companies as that's shaping up to be a major growth business. Semiconductor companies like NXP have long been rumored to be on Samsung's radar but with increased risks surrounding major deals in the semiconductor industry, it's possible Samsung may not risk having a deal go south due to regulatory constraints.
