Home » GENERAL » Why South Korean Conglomerate Samsung Seeks to Restructure Now ?

Why South Korean Conglomerate Samsung Seeks to Restructure Now ?

South Korea’s largest conglomerate Samsung has embarked upon a major restructuring plan in view of withstanding mounting competition both in electronics and engineering markets all over the world .

The mergers within the group will see the shipbuilding and engineering businesses merge, with Samsung Heavy Industries absorbing Samsung Engineering in a share swap plan of issuing 2.36 new shares for every Samsung Engineering share, in a deal valued at 2.5 trillion won ($2.5 billion), the group said in a regulatory filing.

The merger will help Samsung Heavy’s expertise in offshore plant construction and making the combined annual revenue touch 25 trillion won, it said.

One reason put forward by analysts was that Lee Kun-hee, the chairman of the Samsung Electronics, who suffered a heart attack in May, wanted the group to realign and work in unison to enter and operate in the global markets. The merger will also transfer to Lee’s son, Jay Y. Lee more powers to operate both mega units.
Samsung has also announced plans for two major IPOs for its IT unit Samsung SDS and Samsung Everland Inc to raise funds by the younger Mr. Lee to strengthen his hold over affiliates, analysts say. Samsung Electronics, the largest shareholder of Samsung Heavy, will remain the No. 1 even after the merger.

Leave a Reply

Your email address will not be published. Required fields are marked *