The Samsung Group has taken another step in order to consolidate the new leadership with plans for merger that will put the chairman’s son in a much stronger position in the conglomerate.
The all stock merger announced on Tuesday that it will combine Samsung’s de facto holding company Cheil Industries Inc. with the company’s construction and trading company, Samsung C&T Corporation.
This will help the Samsung Group to create a company that will give the group annual revenue of 34 trillion Korean won which is $31 billion.
The biggest shareholder in this new combined company will be none other than Lee Jae-yong who is said to have a 16.5 percent stake in the company.
Lee Jae-yong is the third generation heir of Samsung’s founder and is also the vice chairman of the group’s jewel, Samsung Electronics.
The main part of the ownership transition basically revolves around Samsung Electronics which the Lee family controls through stakes in affiliates which includes Cheil and Samsung Life Insurance Corporation.
According to analysts the merger that was announced today will basically allow the younger Lee to gain control over more of Samsung Electronics.
Apart from this the younger Lee’s ownership of Samsung Electronics has been mainly through Cheil Industries in which he has a 23.2 percent stake.
Cheil has always been very important and central to the Lee family as it helps them to exert power over dozens of other Samsung affiliates through its stakes in various companies.
Now among the most important stake holdings of Cheil is Samsung Life which has more than a 7 percent stake in Samsung Electronics.
Cheil previously used to be called Samsung Everland is now preparing to acquire Samsung C&T by offering 0.35 new Cheil shares for each Samsung C&T share. This new merger is said to be completed within 1st September.
