Samsung merger strengthens heir’s hold over conglomerate
DE FACTO HOLDING FIRM TO TAKE OVER SAMSUNG C&T AS IT TARGETS $54.5B IN SALES BY 2020
The Samsung Group yesterday announced the merger of two major affiliates, as the South Korean business giant accelerates restructuring efforts ahead of a generational power transfer within the founding Lee family.
The all stock deal, approved by the boards of both companies, would see Samsung’s de facto holding company Cheil Industries — which has interests from fashion to theme parks — acquire general trade and construction affiliate Samsung C&T.
The merger, which is expected to be completed by September pending shareholder approval, will see Cheil offer 0.35 new shares for each Samsung C&T share.
The two companies are both listed on the Seoul stock market, with Cheil valued at 22 trillion won ($20.1 billion; Dh73.49 billion) and Samsung C&T 8.6 trillion won as of yesterday morning.
The combined company — which will take the Samsung C&T name — will target annual sales of about 60 trillion won ($54.5 billion) in 2020, compared with their combined sales of 34 trillion won in 2014, Samsung said in a statement.
Creating synergy
“The two companies expect to create synergy by combining their construction businesses, while Samsung C&T’s global network will help develop new opportunities overseas for Cheil’s fashion, resort and catering businesses,” the statement said.
Share prices of both Cheil Industries and Samsung C&T soared by the daily limit of 15 per cent on Tuesday.
Yesterday’s announcement was the latest in a series of moves apparently aimed at solidifying