LS Cable in Talks to Acquire KT Submarine
By Kim Hyun-bin, The Korea Times
October 12, 2020
LS Cable is seeking to acquire KT Submarine to further widen its lead in the local undersea cable market.
“LS Cable is seeking to acquire KT Submarine and is under price negotiations with the firm,” a senior industry official told The Korea Times.
KT Submarine has been showing growth in recent years taking up exclusive contracts to construct submarine fiber optic and power cables as well as other offshore construction projects.
Industry watchers believe the acquisition could create great synergy ahead of the government’s Green New Deal initiative, which aims to increase wind and solar power generators.
In July, the government announced plans to build a floating offshore wind farm in the East Sea off the coast of Ulsan starting 2023.
“Submarine cables will become imperative to connect all offshore wind power generators and most likely a local cable firm will be handed the project. However, the government does not have a specific detailed blueprint on how they plan to initiate the Green New Deal,” another industry official said.
The possible acquisition also comes as KT CEO Koo Hyun-mo has expressed his desire to conduct a major corporate restructuring to focus more on the future growth engines of the telecom industry.
Koo has been aiming to increase investments in artificial intelligence (AI), cloud and advanced technologies in the B2B business while maintaining a stable profit in the mobile and media sector.
Since his appointment in March, KT’s major task has been to dispose affiliates unrelated to telecom, namely KT Submarine and commerce business KTH, to further expedite growth and investments in key growth engines.
In closed-door meetings in March and May, Koo reportedly called on several occasions for the corporate restructuring of its affiliates.