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February 17, 2015updated 19 Aug 2016 3:59pm

Samsung to use $56bn cash pile for further growth

Company expected to pay out fewer dividends to shareholders.

By CBR Staff Writer

South Korean tech giant Samsung is planning to utilise its $56bn cash pile to fund growth which includes acquiring companies.

Despite the decline in profit last year, investors were happy with the 40% dividend boost and its first share buyback since 2007.

Reuters reported Samsung’s head of investor relations Robert Yi as saying that the company is trying to focus on growth and not on providing bigger dividends to shareholders.

Yi said: "Dividends and other forms of shareholder returns are responsibilities that the company has for shareholders, so we will make efforts to meet them."

"But our primary objective is growth and that is what we are communicating to our shareholders."

In the past two years, the smartphone maker has struck 10 deals which mostly included smaller companies. However, investors are prompting the company to look out for bigger deals for better growth momentum.

According to Yi, the company is primarily focused on M&A deals for companies that suit Samsung’s current businesses, and with the experience gathered from the transactions, the company is expected to make bigger M&A deals.

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The decline in share price and earnings has attracted more Value fund managers who are looking for long-term value through shareholder returns policies, which has resulted in shareholders calling for more dividends and share buybacks.

Yi did not detail about the buybacks or dividends but a source familiar with the matter told Reuters that the company is likely to pay out less this year than it did in 2014.

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