Chungho ComNet takes the lead in the ATM market
Chungho ComNet, 3rd in ATM market share will take over FKM, the 4th in market share, and will take the lead in Korean ATM market.
This will lead 4 companies competing for ATM and CD in Korean market reform to big 3 structure.
On the 29th, Chungho ComNet announced, they have signed on MOU regarding the strategic partnership between directors of FKM parent company Fujitsu Frontech, through forming board of directors on the evening of 27th.
As stated in the MOU, Chungho ComNet will take over 100% Of FKM shares, and Fujitsu Frontech will take 10% Of Chungho ComNet shares. Also Fujitsu Frontech will provide the core part of ATM, BRU to Chungho ComNet.
Lee Jung-woo, Vice President of Chungho ComNet have stated “The final agreement will be completed by the end of June” and “Although merging with FKM, it will be operated as sister company”.
During the Asia economy crisis the Jeil, one of the ATM manufacturers in 1998 was acquired by Fujitsu Frontch, the sister company of Fujitsu, and has been the Japanese-Corporation.
Chungho ComNet plans to dispose stocks that own internally to Fujitsu Frontech. The KOSPI publicly traded Chungho ComNet last year had revenue of 890,000,000,000 won last year, Chungho Enterprise and other major holders own 34%, and treasure stock 15%.
Korean ATM market and after service and other market totals about 3,000,000,000,000 won. Nautilus Hyosung has the most shares with 37%, LG N-sis and Chungho ComNet are neck and neck within 23%, and FKM with 17%.
To focus on the Chinese market using M&A strategy
If Chungho ComNet acquires FKM, the market share will be 40% and becomes the 1st ATM manufacturer in the domestic market instantly. There will be the strong impact on the market where the ATM and CD have been supplied.
Chungho ComNet’s decision to cooperate with Fujitsu Frontech has been made to avoid the excessive competition and to enter into the foreign market together.
The domestic financial automated teller machine market has been oversupplied.
Due to increasing use of Non-facing Channel including Internet Banking Service, Mobile Banking Service and etc, the dependence rate on ATM is being dropped and new momentum must be needed to go abroad.
“While Chungho ComNet has been trying to find a new momentum for growth, as the company decided to pursue opportunities in China, Chungho and Hitachi-Omron started to have complications, and Hitachi was a little reluctant to supply Modules to Chungho, since Hitachi has already supplied the complete ATMs to Chinese market, and that’s the reason why we make the cooperation with Fujitsu Frontech” Lee Jung-woo, Vice President explained.
The experts expect the positive result from this acquisition, because this will decrease the competition in the domestic market than before, and then it will contribute to the sound cash flow and financial structure, and also intensified development and marketing.
Fujitsu Frontech can supply the modules to Korean Market by selling to the Korea Subsidiary and expect more benefit from Chungho ComNet’s success in Chinese market in the future.
Lee Jung-woo, Vice President told that in base on stable domestic market, Chungho ComNet will sell the ATMs equipped with Fujitsu Modules abroad including China and to serve our customers high-end products and service by combining both companies’ sales, research and technical capability.
This is a translation of Mail news 2011.05.03.