The South Korean builder, Samsung C&T Corp has line up with Cheil in order to fend off a challenge from a US activist fund and push through a proposed $8 billion merger which is crucial in allowing a smooth leadership succession at the Samsung Group.
Samsung C&T stated on Wednesday that it would sell around 9 million common treasury shares to construction materials firm KCC Corp for 674 billion won.
This deal will be completed on Friday and will make KCC the fourth largest individual shareholder in the company.
Apart from this KCC is also a major shareholder in Cheil Industries Inc. which is an affiliate of the Samsung Group.
Many analysts are of the view that the deal with KCC will help secure the support for the merger that would allow the Samsung Group’s controlling Lee family to consolidate its holdings in the sprawling conglomerate.
The sale of shares to KCC also sets the scene for what may be a protracted battle against Elliott which is the US activist hedge fund.
This Us group had sought an injunction in south Korea to block a deal that it is considering as unfair to Samsung C&T shareholders.
An economics professor at Hansung University, Kim Sang-jo stated that this deal for Samsung is very important as it is the first step in a succession process that requires a long time.
Other analysts and investors are of the view that Elliott which is alos the third largest shareholder in Samsung C&T poses quite a threat to the merger.
Park Ju-gun the head of corporate analysis firm CEO Score stated that this merger is very important for Samsung and this must get done and so Samsung will do everything it can to accomplish this goal.
