Highlighting the sharp differences between the Koreans and the Japanese, Samsung Electronics Co has ended up agreeing to pump $252m into AST Research Inc for a 40.25% stake and very close to control in a deal that represents only the latest in a string of major investments in US technology companies by South Koreans, which include Hyundai Electronics Co buying NCR Microelectronics and a dominant shareholding in Maxtor Corp, which has been followed by management control, and Daewoo Telecom Ltd buying Leading Edge Products Inc. By contrast, it took all the Japanese bar Fujitsu Ltd 20 years to decide to buy anything significant, and Fujitsu’s dominant investment in Amdahl Corp was unintentional and came about by default. Samsung will pay $378m all told for the stake: it will pay $19.50 per share for 6.6m new shares, 19.9% of the enlarged AST equity, against a price in the market ahead of the announcement of $14.375. It will then make a tender offer to existing holders for another 5.82m at $22 per share, and will buy 5.63m further new AST shares at the $22 tender price. The planned stake and the size of the investment are over double what had been expected. Samsung also agreed to provide a letter of credit to support AST’s $96.7m note to Tandy Corp and to provide funds for $75m of the note which is due in July 1996. The commercial relationship between the two will be expanded through a larger supply of critical components made by Samsung and used in AST personal computers, as well as joint product development, and cross-licensing. There is a stand-off to prevent Samsung increasing its stake beyond 49.9% for four years. In Seoul, the company said it had now found a major export channel for Korean-made computers and peripherals. Together, the two companies have capacity to make 2.3m personal computers a year, 700,000 from Samsung. Separately, Samsung Co confirmed that, as expected, it has chosen London as its European headquarters. And AST previewed a new range of Advantage models for consumers and small offices. The machines come with new features, including a speakerphone, faster CD-ROM drive, higher power and an on-line reference library aimed at technophobes. Prices for the systems, to be formally announced on March 6, will be lower than comparable existing Advantage models, starting at $1.200 for high-end 80486 and from $1,800 for the Pentium models.
