Samsung speeds up succession

Samsung Electronics acquired shares in two of Samsung Group’s affiliates, Samsung SDI and Cheil Industries, on Thursday, in a bid to restructure the group’s businesses ahead of a much anticipated power transition from the ailing chairman Lee Kun-hee to his only son Jay-yong.

The tech giant purchased 2.17 million shares in secondary battery maker Samsung SDI, and 2.07 million shares in Cheil Industries, the electronics materials affiliate of Samsung Group.

Samsung Electronics also bought 2.44 million shares in the electronics materials firm which were previously held by Samsung Card.

The shares acquired by the tech company are said to be worth around 656 billion won ($641 million) in total. 

The world’s largest electronics manufacturer will be able to tighten its grip over Samsung SDI as it will continue to remain the largest stockholder with a 19.6 percent stake even after the battery maker completes its merger with the materials firm.

“The latest acquisition of the shares in Samsung SDI and Cheil Industries will also allow Samsung Electronics to reinforce its electronics business by rounding up the Samsung affiliates in related industry fields, including Samsung Display, Samsung Electro-Mechanics and Samsung SDI,” a market analyst said.

Samsung Group has been rapidly streamlining its business structure over the past couple of years, with the pace picking up this year ahead of a widely expected power transition to the third generation of the Samsung family.

Last month, Samsung SDI announced that it would be merging with Cheil Industries.

The battery maker explained that the acquisition is aimed at sharpening its competitive edge in the battery business by utilizing the chemical and electronics materials technologies of Cheil Industries.

Samsung Everland, a theme park operator and de facto holding company of Samsung Group, will seek an initial public offering by the first quarter of 2015, and information and communications technology services firm Samsung SDS announced its plan for an IPO last month.

The IPO of the theme park is seen as a move to simplify the group’s complex equity ties and transform it into a holding company.

Samsung vice chairman Lee Jay-yong, currently the largest shareholder of Everland with a 25.1 percent stake, is expected to take control of the envisioned holding firm.

The series of plans for IPOs and mergers and acquisitions comes amid mounting worries over Samsung chairman Lee Kun-hee’s deteriorating health.

The chairman was hospitalized after suffering a heart attack last month and is said to be slowly recovering, according to Samsung officials. His only son Jay-yong will be taking over the electronics and finance side, with his sisters Boo-jin and Seo-hyun running Samsung’s other businesses, including Shilla Hotel and the construction arms.

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