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Samsung speeds up restructuring

November 26, 2014

South Korean corporate giant Samsung Group has said it will part with stakes in a number of affiliates. It said the sales would also help to make in-house governing structures more transparent in the future.

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Samsung Electronics HQ
Image: REUTERS

Samsung Group announced Wednesday it would sell stakes in four petrochemical and defense affiliates to the Hanwha conglomerate for about $1.7 billion (1.36 billion euros). The transaction would be finalized in the first half of 2015, the company added.

The firm explained the deal involved various divisions of the company, including Samsung Electronics, selling their combined stakes in defense enterprise Techwin and General Chemicals.

A 50-percent stake held by Samsung in its joint venture with the French energy giant Total would also be sold to Hanwha, the company said in a statement.

Killing two birds with one stone

The South Koreans' envisaged transaction will mark the first sale of Samsung affiliates since the group was forced to shed its ailing carmaking unit in 1997 during the Asian financial crisis.

Samsung's founding Lee family has lately been under mounting pressure from the state to simplify its complex cross shareholdings and make its governing structure more transparent, but the company's latest move also indicates its desire to become more competitive by focusing on its core profit-making units.

"The deal shows Samsung is determined to shed non-core units deemed not competitive enough globally and to focus on key businesses like electronics, finances, construction and engineering," Kium Securities analyst Kim Ji-San told AFP news agency.

hg/cjc (Reuters, AFP, AP)