Samsung SDS, a key IT unit of Samsung Group, is considering splitting its logistics business and merging it with Samsung C&T Corp., the group's fashion and trading arm, industry sources said Friday.
Samsung, South Korea's top family-controlled conglomerate, will likely announce a plan next week to split off Samsung SDI's global logistics division and combine it with Samsung C&T's trading segment, they said.
The merger would help Samsung C&T form a competitive business portfolio and thus create synergy for its global logistics business, according to the sources.
In a regulatory filing, Samsung SDS said: "The company is considering a split of business divisions, but no specifics have been determined yet. It is not weighing a plan to merge after splitting business segments."
Samsung C&T also denied the rumor, saying it is not considering a merger with the logistics division of Samsung SDS.
Samsung C&T, which was formed through a merger between Samsung C&T and Cheil Industries last year, acts as Samsung's de facto holding firm. The merger was part of the group's efforts to streamline its ownership structure through big shakeups of its affiliates.
The sources further said Samsung may transfer the IT solutions service division of Samsung SDS to Samsung C&T. Samsung was also rumored to merge the consulting SI business of Samsung SDS with Samsung Electronics Co. In a filing with the nation's bourse operator, Samsung Electronics said it is not considering such an option.
Market watchers said Samsung may push for the split of Samsung SDS' business segments as part of an overall group plan to reorganize its ownership structure.
Samsung Electronics, the group's flagship, holds the largest stake in Samsung SDS at 22.6 percent, followed by Samsung C&T with
17.1 percent. Lee Jae-yong, the group's heir apparent, owns the third-highest at 9.2 percent interest, with his sisters Bu-jin and Seo-hyun having 3.9 percent each.
Speculation has been swirling that Samsung SDS, in which the owner family has a 17-percent stake, may play a critical role in the group's ownership revamp.
In February, market rumors arose that Samsung was pushing to sell a controlling stake in Cheil Worldwide Inc., an in-house advertising agency, to French ad giant Publicis Groupe. Their talks are known to have fallen through recently due to differences over specific conditions.
Samsung has been offloading a handful of its businesses in an apparent bid to focus on its mainstay businesses and clear the way for the management succession from Lee Kun-hee to his son Jae-yong.
The elder Lee, who serves as the de facto head of the group, is recovering from a heart attack he suffered in May 2014.
Last year, Samsung also sold some of its chemical businesses to Lotte Group, including Samsung SDI Co.'s chemical arm along with Samsung Fine Chemicals Co. and Samsung BP Chemicals Co. Earlier, it unloaded four other defense and chemical units. (Yonhap)
