Chemtronics has pulled out of its plan to buy Samsung Electro-Mechanics’ Wi-Fi module business.
Chemtronics’ subsidiary Witz was originally announced to be acquiring Samsung’s Wi-Fi module business for 105.5 billion won back in January.
Chemtronics said it was canceling the deal due to the potential fast changes in the Wi-Fi module market.
The company expected the sector to show continued growth when it signed its contract with Samsung but uncertainty over the business’ future has increased, the company explained.
Therefore, Wits requested to Samsung that they cancel their contract, which the latter agreed to. Chemtronics will be reimbursed with the down payment it already paid.
It is likely that some changes made by Samsung Electronics, the main customer of the modules, around its procurement of the modules negatively affected Chemtronics’ prospects.
Chemtronics initially expected double digit operating margin rates for its acquisition of the business.
Samsung Electro-Mechanics CEO Kyung Kye-hyun was a strong supporter of Chemtronics’ acquisition of the Wi-Fi unit as well.