Samsung SDS to merge with Samsung SNS

Samsung SDS, an information and communication technology service firm, announced Friday a plan to merge with Samsung SNS, a network service and solution provider.

The two companies are units of Korea’s top conglomerate Samsung Group. The merger touched off speculation that the group has begun in earnest to reorganize its affiliates to prepare for the time after group leader Lee Kun-hee steps down.

Samsung SDS said in its statement that its board of directors decided to absorb its sister firm to reinforce its business competitiveness in the fast-changing ICT market.

“By maximizing the business capacity of both firms, Samsung SDS will grow into a global ICT service firm,” said Koh Soon-dong, CEO of the ICT firm.

Based on its experience in management of IT infrastructure and business projects abroad, Samsung SDS aims to increase its capacity to operate a project to build a high-tech “smart town.”

“In order to build the smart town, not only the capability to build infrastructure but technology to connect the buildings and facilities are necessary. Samsung SDS made the decision since Samsung SNS has expertise in that technology,” a Samsung SDS official said.

Samsung SNS shares will be converted into Samsung SDS shares at a 1-0.462 ratio. That is, those holding 2.16 Samsung SNS shares will be given one Samsung SDS share.

The latest merger brought a change to the proportions of stocks held by the largest shareholders in the firm.

Still standing as the third-largest shareholder of Samsung SDS, Samsung Electronics vice chairman Lee Jay-yong will hold 11.26 percent of the new firm’s shares, up from 8.81 percent. The jump is the largest among the major shareholders.

Samsung Electronics will hold 22.58 percent of its affiliate’s stakes, up by 0.91 percent, while Samsung C&T will hold 17.08 percent, down 1.21 percent.

Samsung’s heir apparent Jay-yong is the largest shareholder of Samsung SNS with a 45.69 percent stake, followed by Samsung Electronics with 35.47 percent.

Market analysts speculate Samsung Group is accelerating the transition of its leadership from its leader Lee Kun-hee to the son as a series of business M&A deals were recently made among its affiliates.

Samsung Everland, an amusement park operator, announced Monday that it would take over the fashion unit of Cheil Industries.

Jay-yong is the largest shareholder of the theme park business firm, holding 25.1 percent of shares, followed by his sisters Boo-jin and Seo-hyun, both holding about 8 percent.

The Samsung SDS official declined to comment on the transition issues, only saying that “the recent merger has nothing to do with the transition of leadership but is aimed at enhancing business competitiveness.”


By Kim Young-won(wone0102@heraldcorp.com)