February 23, 2016 / 6:24 AM / 2 years ago

Samsung Elec denies report of Samsung Medison sale plan

SEOUL (Reuters) - Tech giant Samsung Electronics Co Ltd on Tuesday denied a report that it planned to sell its majority stake in medical equipment maker Samsung Medison Co Ltd, saying it was groundless.

Employees walk in the main office building of Samsung Electronics in Seoul, South Korea, January 6, 2016. REUTERS/Kim Hong-Ji

ChosunBiz, a South Korean online publication, said Samsung Electronics will formally start the sales process for its 68.5 percent stake in unlisted Samsung Medison in March and has already begun searching for potential buyers.

Samsung Medison’s weak earnings are driving the decision to sell the company, it said.

Samsung Electronics first bought a stake in Samsung Medison in 2011 as it sought new growth and a more diverse business portfolio. It bought additional shares and assigned a book value of 478 billion won ($388 million) to its stake as of end-September.

Samsung Medison booked an operating loss of 15 billion won for the first nine months of 2015, hurt by higher operating and research costs as well as weak sales growth amid fierce competition from rivals such as GE and Siemens .

The Samsung Group has been divesting its stakes in some businesses such as chemicals and defense units in recent months as part of a group-wide restructuring to focus on technology and pharmaceuticals.

Reporting by Se Young Lee; Editing by Edwina Gibbs

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