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. 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:

“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

9 reports cite this report:

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

Directory of 68 Video Surveillance Startups on Sep 18, 2019
This directory provides a list of video surveillance startups to help you see and research what companies are new or not yet broadly known. 2019...
Schmode is Back, Aims To Turn Boulder AI Into Giant on Sep 16, 2019
One of the most influential and controversial executives in the past decade is back. Bryan Schmode ascended and drove the hypergrowth of Avigilon...
ASIS GSX 2019 Final Show Report on Sep 12, 2019
IPVM went to Chicago for ASIS GSX 2019, with many exhibitors disappointed about traffic and the exhibitor schedule changing next year. However,...
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...
US Government Ban of Dahua, Hikvision, Huawei Takes Effect Now on Aug 13, 2019
The 'prohibition on use or procurement' of Dahua, Hikvision and Huawei products and 'essential components' take effect today, August 13, 2019, one...
Proactive CCTV "Only Affordable Video Archiving Solution" Profile on Aug 12, 2019
Proactive CCTV is claiming to offer "the only affordable video archiving solution on the market", reducing the storage typically required for H.265...
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...
Dahua, Hikvision, Huawei US Ban Rules Released on Aug 08, 2019
The US government has released rules on how the 2018 NDAA ban of Dahua, Hikvision, and Huawei will be implemented when it takes effect in 5...
Vivotek Revenue Soars on Aug 05, 2019
Vivotek's revenue has soared so far in 2019, growing 45%. Inside this note, we examine import records and see who is driving Vivotek's growth...
Online Video Surveillance Sales Comparison - Amazon, B&H, CDW, LTS, Super Circuits, More on Jul 31, 2019
IPVM has uncovered the key trends and top options being offered across commonly used surveillance sellers. How has the market shifted since we...

Most Recent Industry Reports

ONVIF Suspends Huawei on Sep 20, 2019
Huawei has been 'suspended', and effectively expelled, from ONVIF so long as US sanctions remain on the mega Chinese manufacturer. Inside this...
Open Access Controller Guide (Axis, HID, Isonas, Mercury) on Sep 19, 2019
In the access control market, there are many software platforms, but only a few companies that make non-proprietary door controllers. Recently,...
Axis Perimeter Defender Improves, Yet Worse Than Dahua and Wyze on Sep 19, 2019
While Axis Perimeter Defender analytics improved from our 2018 testing, the market has improved much faster, with much less expensive offerings...
Directory of 68 Video Surveillance Startups on Sep 18, 2019
This directory provides a list of video surveillance startups to help you see and research what companies are new or not yet broadly known. 2019...
Uniview Prime Series 4K Camera Tested on Sep 18, 2019
Is the new Uniview 'Prime' better than the more expensive existing Uniview 'Pro'? In August, IPVM tested Uniview 4K 'Pro' but members advocated...
US Army Base To Buy Banned Honeywell Surveillance on Sep 17, 2019
The U.S. Army's Fort Gordon, home to their Cyber Center of Excellence, has issued a solicitation to purchase Honeywell products that are US...
Vivotek "Neural Network-Powered Detection Engine" Analytics Tested on Sep 17, 2019
Vivotek has released "a neural network-powered detection engine", named Smart Motion Detection, claiming that "swaying vegetation, vehicles passing...
Schmode is Back, Aims To Turn Boulder AI Into Giant on Sep 16, 2019
One of the most influential and controversial executives in the past decade is back. Bryan Schmode ascended and drove the hypergrowth of Avigilon...
Manufacturers Unhappy With Weak ASIS GSX 2019 And 2020 Shift on Sep 16, 2019
Manufacturers were generally unhappy with ASIS GSX, both for weak 2019 booth traffic and a scheduling shift for the 2020 show, according to a new...