Samsung Surveillance Sold Off To Hanwha

By: John Honovich, Published on Nov 28, 2014

As part of a major move involving numerous divisions, Samsung has sold off its stake in its video surveillance business.

In this note, we examine the acquirer, Hanwha, their focus and financials, plus raise 3 critical risks that could impact Samsung's positioning in video surveillance.

Hanwha Overview

The acquirer is another Korean conglomerate, named Hanwha. Though Hanwha generates ~$35 billion USD annual revenue, it is only a fraction of Samsung Electronic's size, who generates over $200 billion USD annual revenue.

Hanwha is primarily focused in defense, chemicals and life insurance. Accordingly, it has a very low recognition brand, unlike Samsung, who is routinely ranked as one of the top 10 global brands.

Hanwha is acquiring multiple businesses [link no longer available]. In addition to Techwin, Hanwha is acquiring Samsung General Chemicals and Samsung Thales, a defense-oriented business.

Samsung Techwin / Surveillance

Samsung's surveillance offering were not part of the 'main' Samsung Electronics corporation (the business behind the phones, tablets, monitors, etc.). However, until this deal, Samsung was a part owner of the company, named Samsung Techwin, that manufactured surveillance products.

Samsung Techwin's surveillance sales are only a fraction of their business. According to Techwin's 2013 financial report, they did ~$2.6 billion in revenue. More than half of that revenue came from 'defense machines' and 'engine and turbine machinery'. Even within the Techwin division that surveillance falls under, we estimate that is a minority of that division's sales.

The net/net is that the surveillance business is a tiny part of this overall deal and that the strategic focus for Hanwha is the defense / chemical businesses, not surveillance.

Get Notified of Video Surveillance Breaking News
Get Notified of Video Surveillance Breaking News

Claims 'Business As Usual'

The European security group has come out with a statement [link no longer available]:

“Hanwha Group’s investment in Samsung Techwin will enable us to continue research, design, and development of innovative market leading solutions that will create new business opportunities and ensure our future growth,” said Mr Jong Wan Lim, Managing Director of the Security Solution for Samsung Techwin Europe Ltd. “Customers can be assured that it is ‘business as usual’ and that there will be absolutely no disruption to the supply of products or to the normal high levels of pre and post sales support that customers have come to expect from Samsung Techwin.”

Key Risks / Questions

Despite the stock assurances of 'business as usual', we see three risks / questions in this deal:

  • What happens to the Samsung brand? The Samsung brand carries significant weight. Will Samsung surveillance, now Hanwha, be allowed to keep using the former company's brand? If they have to change, it will cause significant confusion and difficulty marketing under an unknown name. [Update: A report from a Samsung Techwin press conference claims that a 'branding agreement [to retain Samsung's name] is still in negotiation, but is assumed to be for “many years”. How many years will be critical. One comparable is the GE Security / UTC deal where UTC was allowed to use the GE brand for 2 years. However, once that period is over, the brand is lost.]
  • Will they continue to bundle / throw in Samsung products? Many industry insiders have mentioned how Samsung Techwin security group routinely throws in Samsung electronic products to help win deals (e.g., monitors). Will they have access / ability to do this now?
  • Most importantly, how committed will Hanwha be to the video surveillance business? Samsung Techwin has been very aggressive the past few years in development, sales and low pricing of Samsung surveillance equipment. Will this continue? Hanwha's primary focus here appears to be the chemical and defense businesses. Will it dedicate resources to the surveillance business or will it be seen as less strategically important?

The deal is not scheduled to close until 'the first half of 2015' which likely means the full impact of this deal may not be clear for a year or longer.

VOTE / Poll

What do you think will happen to Samsung Video Surveillance business?

UPDATE - Now Hanwha Techwin

See: Samsung Techwin Now Hanwha, Overseas To 'Remain Intact' and Goodbye Samsung, Hello Wisenet X

10 reports cite this report:

Acquisitions - Winners and Losers on Dec 10, 2019
Most major manufacturers have been acquired over the last decade. But which have been good deals or not? In this report, we analyze the...
Panasonic Sells Off / Spins Out Security Business on Jun 02, 2019
Panasonic has sold off its security systems business to a private equity firm, after suffering years of challenges. The new company, which will...
Intersec 2019 Show Report on Jan 23, 2019
The 2019 Intersec show, held annually in Dubai, is now complete. IPVM attended for 3 days, interviewing numerous Chinese and Western video...
Hanwha Techwin Spins Out Security Business on Mar 06, 2018
In an era of security acquisitions and mergers, with most recently Avigilon being acquired by Motorola and Bosch merging its security businesses,...
The Real Samsung Is Back, Launching Extreme Video Analytics on Jun 30, 2016
No, this is not about Hanwha / Techwin. This is about the real / original Samsung group. After selling Techwin, which included their video...
Samsung Losing Its Name and Integrity on Mar 04, 2016
Samsung's video surveillance division told everyone that nothing was going to change. They were wrong, if not lying. They are losing the Samsung...
CDW: We Love You Axis But Here is Samsung for 50% Less on Jun 12, 2015
Axis steering end users to CDW has been a hot topic on IPVM recently. Unfortunately, that admiration is not exactly mutual. Our new Online...
Samsung Techwin Workers Protest + Stock Plunges on Dec 10, 2014
The Samsung sell-off is off to a shaky start. While the US division frantically tries to convince everyone that things are fantastic, worker...
Major Moves - Security Manufacturers 2014 / 2015 on Dec 08, 2014
This guide summarizes the biggest moves of security manufacturers in 2014 and 2015, concentrating on acquisitions, fund raising, significant stock...
Manufacturer Sales Pitches Revealed on Dec 02, 2014
IPVM sent a 'secret shopper' to ISC East 2014 to talk to manufacturer sales reps at their booths. We wanted to understand and contrast how they...
Comments (41) : PRO Members only. Login. or Join.

Related Reports

Huawei: Hikvision / Dahua "Strategy Is Just To Provide Cheap Cameras" on Jan 24, 2019
At the Intersec 2019 show in Dubai, IPVM spoke with the show's "exclusive artificial intelligence sponsor" Huawei who recently declared their...
Avigilon Hires Hikvision NA Head of Marketing As VP of Global Marketing on Jan 25, 2019
Avigilon has hired Alex Asnovich [link no longer available], who left Hikvision as Head of Marketing North America, to becomes Avigilon's Vice...
Dahua China Significant Job Cuts on Jan 28, 2019
Dahua China has cut a significant number of jobs in the past few months, according to numerous sources. This is a significant shift from Dahua's...
Avigilon USA Factory Visit Report on Apr 01, 2019
In a building that looks more like corporate offices than a 'factory' and just down the road from suburban housing developments is Avigilon's USA...
Panasonic Sells Off / Spins Out Security Business on Jun 02, 2019
Panasonic has sold off its security systems business to a private equity firm, after suffering years of challenges. The new company, which will...
Hanwha Techwin Dropping Huawei on Jun 06, 2019
Hanwha Techwin is dropping Huawei Hisilicon from all of their products, the company has confirmed to IPVM. Inside this note, we examine Hanwha's...
2019 Mid-Year Video Surveillance Guide on Jul 01, 2019
IPVM's new 400+ page Mid-Year Industry Guide brings all of these issues and events together in a single resource to read and review. It can be...
Stanley Makes "Multi-Million Dollar Investment" Into Banned Hikvision Products on Aug 09, 2019
Just days from the US government ban going into effect, US mega-corporation Stanley has dramatically increased its imports of banned Hikvision...
Megvii Financials and Growth Examined on Aug 30, 2019
Megvii has already received more than a billion dollars in investment. Now, the company, a top China facial recognition provider, has filed for an...
In China, Foreign AI Companies Banned or Disadvantaged, Says Top China AI Company on Aug 28, 2019
Non-China (PRC) companies are prejudiced and unfairly targeted inside of the PRC's booming AI market, which not only denies them revenue inside of...

Most Recent Industry Reports

Axis and Genetec Drop IFSEC 2020 on Jan 23, 2020
Two of the best-known video surveillance manufacturers are dropping IFSEC International 2020, joining Milestone who dropped IFSEC in 2019. The...
Multipoint Door Lock Tutorial on Jan 23, 2020
Despite widespread use, locked doors are notoriously weak at stopping entry, and thousands can be misspent on locks that leave doors quite...
Avigilon Shifts Cloud Strategy - Merges Blue and ACC on Jan 23, 2020
Avigilon is shifting its cloud strategy, phasing out its Blue web-managed surveillance platform as a stand-alone brand and merging it with its ACC...
Verkada Paying $100 For Referrals Just To Demo on Jan 22, 2020
Some companies pay for referrals when the referral becomes a customer. Verkada is taking it to the next level - paying $100 referrals fees simply...
Camera Analytics Shootout 2020 - Avigilon, Axis, Bosch, Dahua, Hanwha, Hikvision, Uniview, Vivotek on Jan 22, 2020
Analytics are hot again, thanks to a slew of AI-powered cameras, but whose analytics really work? And how do these new smart cameras compare to top...
Intersec 2020 Final Show Report on Jan 21, 2020
IPVM spent all 3 days at the Intersec 2020 show interviewing various companies and finding key trends. We cover: Middle East Enterprise...
Vehicle & Long Range Access Reader Tutorial on Jan 21, 2020
One of the classic challenges for access control are parking lots and garages, where the user's credential is far from the reader. With modern...
Clearview AI Alarm - NY Times Report Says "Might End Privacy" on Jan 20, 2020
Over the weekend, the NY Times released a report titled "The Secretive Company That Might End Privacy as We Know It" about a company named...
Favorite Camera Manufacturers 2020 on Jan 20, 2020
The past 2 years of US bans and sanctions have shaken the video surveillance industry but what impact would this have on integrators' favorite...
"Severely Impacted" Mercury Security 2020 Leap Year Firmware Issue on Jan 17, 2020
One of the largest access controller manufacturers has a big problem: February 29th. Mercury Security, owned by HID, is alerting partners of the...