According to a report published by the Korea Times this week, South Korean based LS Cable has ambitions to acquire KT Submarine, thus strengthening its market-leading position in the region’s subsea market.
The plans have been denied by both parties with KT stating that they have no current plans to dispose of KT Submarine and LS Cable similarly refuting the suggestion that negotiations are underway.
However, industry insiders believe that the move might not be as off the mark as the two companies have implied.
The Korean Government is making a big push towards its Green New Deal Initiative and it is thought that a merger of LS Cable and KT Submarine’s interests could create more synergy ahead of the Initiative’s launch. The government recently announced plans to build an offshore wind farm in 2023 and subsea cables will play an integral role in making this a reality. Speaking to the Korea Times on the subject, one industry official said “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”.
It’s also no secret that KT’s new CEO Koo Hyun-mo is currently looking at conducting a major restructuring of the business, in order to enable future investments in key growth technologies. Although KT have denied that negotiations are taking place, the potential acquisition of KT’s submarine business by LS Cable could free up funds for some of the planned technology investments.