February 19, 1998 in Social Responsibility News

Construction Equipment Division of SAMSUNG Heavy Industries Signs Letters of Intent with Volvo Construction Equipment and Clark Material Handling

SEOUL, Korea - February 19, 1998 - Samsung Heavy Industries Co., Ltd (SHI) and Volvo Construction Equipment (VCE) announced today that the two companies have respectively signed and acknowledged a Letter of Intent covering the proposed acquisition of a majority of SHI's construction equipment division by VCE. This is proposed to include Samsung's plant at ChangWon, South Korea and the Korean distribution organization. Samsung intends to retain a minority holding in the business.
Separately, SHI announced that it has also signed a Letter of Intent with Clark Material Handling Co. of USA, covering the proposed acquisition of SHI's forklift truck business by Clark. The acquisition deal under works includes 16.2 acre site and 16,500 square meter forklift truck plant at ChangWon.

Samsung has entered into final negotiations with Volvo and Clark and the signing of binding agreements will take several weeks to finalize. No further information will be released before that time.

Volvo Construction Equipment, a subsidiary of Swedish automotive maker AB Volvo, recorded sales of USD 2,2 billion last year. With the acquisition of Samsung Heavy's Construction Equipment, Volvo gains production capability in the East Asia Region.

US-based Clark Material Handling Company has had technical and OEM alliance with SHI since 1984. Clark recorded sales of USD 480 million last year and is the second largest supplier of forklift trucks in its home market.

Samsung Heavy Industries' construction equipment division currently has approximately 2,000 employees, recorded sales of Won 760 billion (approx. USD 700 million) in 1997 and manufactures over 80 models covering excavators, forklift trucks, wheel loaders and cranes, among others. Out of the total, the forklift truck business employs 180 people and recorded sales of Won 80 billion last year. With the sale of its construction equipment division, SHI will focus on operating three major business divisions: Shipbuilding, Industrial Machinery and Construction.


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