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Pantech official sees no downside to deal

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May 04,2005
Pantech Group has a better chance of succeeding in the global market since it took over SK Teletech, SK Telecom’s cell phone manufacturing subsidiary, said Park Byeong-yeop, the group’s vice chairman. “In order to go into the global market, we felt that we had to overcome the intense competition in the local market. “In this sense, SK Telech expands our organization and makes our presence here stronger,” Mr. Park said at a press conference yesterday. In a deal worth 300 billion won ($299 million), announced Tuesday, Pantech bought a 60-percent stake in SK Teletech through SK Telecom, which will be the second-largest shareholder, with a 29.1-percent stake. The takeover puts Pantech in a better position to supply phones to SK Telecom, the largest mobile phone operator in Korea, and makes Pantech the second-biggest domestic cell phone maker. “SK Group contributed largely to the Korean economy but has been having difficulties in becoming a global group. A few months ago I met with SK Group Chairman Chey Tae-won and he seemed to be worried about this, so I suggested that we work together,” Mr. Park said. Last week, SK Telecom reported an 18.6-percent drop in net income for the first quarter year-on-year, much of it stemming from its investment in SK Teletech. Now that it is no longer owned by SK Telecom, SK Teletech will be relieved of government antitrust restrictions that limited handset production to 1.2 million units a year. by Wohn Dong-hee


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