Samsung Electronics wants to split itself into two separate companies. According to the latest report, Samsung’s board of directors would meet very soon to announce this decision.
Samsung, which is currently one of the largest electronics company, wants to split itself into two separate organizations. This split would allow the heirs of the founding Lee family to strengthen their grip on leading the global smartphone industry. The United States activist hedge fund Elliott Management proposed a split last month to boost the shareholder value.
The hedge fund wants Samsung Electronics to divide into a holding vehicle for ownership purposes and an operating company, pay a $26 billion special dividend, pledge to return at least 75 percent of free cash flow to investors and agree to appoint some independent directors.
So far, the Lee family and Samsung have not commented on this report, but the company’s efforts to reorganize itself have been accelerated since Jay Y Lee. Took over the reins after his father and Samsung patriarch Lee Kun-hee was incapacitated following a heart attack in 2014.
“Even if Samsung Electronics does not comment on specifics such as the timing of a split, the firm will at least say it will implement ownership structure changes in a reasonable manner,” HI Investment said in a report.
Recently, South Korean prosecutors raided Samsung Group offices in regards to corruption allegations and buying influence through the President’s confidant Ms. Choi who has been indicted in an influence-peddling scandal. Last week top executives of the company were also called in for questioning from the Supreme Prosecutors Office.