Samsung is looking to acquire medical equipment manufacturers to challenge Siemens

Early morning news on July 18th, Samsung Electronics is planning to acquire some medical equipment manufacturers to challenge General Electric and Siemens in this field.

Samsung Electronics Senior Vice President Cho Jae-moon said last week that Samsung Electronics is in contact with a number of companies, but he did not disclose specific acquisition targets. The company's previously announced plan shows that Samsung Electronics will spend 1.2 trillion won (about $1.1 billion) on medical equipment business by 2020.

Samsung Group Chairman Lee Kun-hee plans to turn medical equipment sales into a 10 trillion won business, and the acquisitions will help Samsung achieve that goal. Lee believes that as the populations in the United States, Europe and Japan age, demand for equipment such as MRI detectors and X-ray machines will rise.

Bae Ki Dal, an analyst at Shinhan Investment, said: "The demand for expensive medical equipment will continue to grow. This market is currently dominated by foreign companies. How Samsung participates in the competition in this market is worth watching." Samsung Electronics acquired 43.5% of the shares of ultrasound equipment manufacturer Medison last year and increased its stake in the company to 65.8% in April this year. In addition, Samsung Electronics also acquired 100% of Prosonic's shares.

Zhao Zaiwen said: "We have several companies on our acquisition target list and we have contacted most of them. One of our acquisition targets is the company that ranks first in the fields of ultrasonic equipment, X-ray machines and magnetic resonance imaging detectors." He also said that Samsung Electronics tends to acquire some smaller companies with excellent technology.

GE's medical device business had revenue of $16.9 billion last year, up 5.6% year-on-year, while Siemens' related business had revenue of $17.4 billion last year, up 3.4% year-on-year.

In addition to acquisitions, Samsung Electronics will also strengthen its research and development capabilities in the medical device business. The number of employees in the company has grown from less than 10 in 2009 to more than 200. Samsung Electronics is likely to launch its first self-branded medical device product in the second half of this year.