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May 26, 2015

Samsung $8.1bn merger strengthens Lee family position

$8.1bn all share deal for Cheil and Samsung C&T.

By

Samsung is merging Cheil Industries and Samsung C&T as part of a major restructuring.

The $8.1bn all-share deal with see Cheil, a fashion and leisure construction business, take over the construction and engineering company Samsung C&T.

The Lee family holds a 42% stake in Cheil, with the motivation for the move appearing to be driven by the Lee family’s efforts to ensure control of Samsung.

The strategic positioning of the move appears to be supported by C&T holding a 4.1% stake in Samsung Electronics and Cheil, with a 19% holding in the company’s Life Insurance branch. Currently, the largest shareholder in Cheil is Lee Jae-young, Mr Lee’s son and presumed heir.

According to analysts, Cheil is central to the family’s strategy for securing control of Samsung, which is why the company has seen an increased demand for stock since its flotation in December.

Samsung has said that the move is to combine the construction interests of the two companies and that C&T’s global network would help to develop its international fashion business.

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