Samsung is considering the potential acquisition of Hitachi’s home appliance segment

Samsung Electronics is reportedly considering the acquisition of the home appliance division of Japanese firm Hitachi. Recent Korean news reports, citing Nikkei, suggest that the deal could be worth around 100 billion yen ($678 million). Neither firm has publicly discussed this as of yet, but the report suggests that Hitachi is looking to offload its home appliance division as it shifts its business strategy to digital services and profit generated after sales.

Hitachi’s strategic shift and market struggles

Hitachi is a reputable retailer of household appliances such as refrigerators and washing machines in Japan. The firm is struggling to make its “white goods” business align with its new strategy. The new paradigm is designed to generate profit from digital sales after the initial sale, something that is difficult for conventional home appliances to facilitate. The shift in strategy comes when most Japanese electronics firms are experiencing more competition in the domestic market. Brands from other Asian nations have grown stronger since the 2010s, compelling local firms to either adapt or overhaul their business strategies.

Samsung’s global ambitions and previous success

For Samsung, a longstanding worldwide leader in home appliances, the takeover of Hitachi’s domestic operations would be a huge plus. It would give Samsung a much more solid presence in the Japanese market, an area where local brand loyalty has long been a key element. The potential deal mirrors Samsung’s successful long-term plan with its previous acquisitions.

Samsung acquired Harman International in 2017 for $8 billion, and the outcome is that this investment was worth it. Harman’s profits doubled those of Samsung’s own TV and home appliance businesses by the end of 2024. This record indicates that if the Hitachi deal occurs, Samsung is prepared to take time to enhance the brand’s potential. What would become of the Hitachi home appliance brand following a potential acquisition is uncertain, but Samsung’s record indicates it would be a wise and lucrative choice.

Source: Nikkei

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