Samsung SDS on Thursday said that it won't be selling its home network system unit after all, despite signaling its ready to offload the division earlier this year. The Samsung Group-owned company confirmed as much in a recent filing with the Korea Exchange, indicating that its recent attempts to sell the unit in question have been unsuccessful. According to previous industry reports, the Seoul-based company has been negotiating a potential sale of its home network system division with Allegion, a Dublin, Ireland-based home security company. Allegion was allegedly looking to purchase the unit solely due to its door lock business that comprises the majority of the division's annual revenue that amounted to 160 billion won, i.e. just over $143 million in 2016. While profitable, the unit as a whole contributes less than two percent of Samsung SDS's yearly revenue and is therefore seen as disposable, some industry watchers claim.
Samsung SDS and Allegion have reportedly been negotiating a sale of the former's home network solutions business since late 2016 but are said to have made little progress on the matter. It's currently unclear why their negotiations haven't advanced in the last half year in light of the fact that both parties are seemingly interested in the deal, but given Samsung SDS's recent filing with the Korea Exchange that indicates the company opted to "withdraw the [sale ] plans," it seems that talks have completely broken down by now. Allegion was said to be primarily interested into the lockmaking division of Samsung SDS's home network systems unit, meaning it's possible that the Irish company wasn't willing to acquire the entire business. Regardless of the actual issue, the two parties likely weren't able to agree on the value of the deal, as is often the case with scrapped acquisition attempts.
Allegion previously hinted at putting a larger focus on the South Korean market and purchasing Samsung SDS's unit might have been an efficient method of doing so, especially after the firm already acquired the largest door lock company in the country - Milre Systek. Samsung SDS's efforts to sell off its home network systems division were likely prompted by its parent company's recent attempts to streamline its operations with the goal of increasing profitability.