Samsung mulls split to fuel investor bonanza and management shake-up
South Korean electronics giant Samsung is considering cleaving itself in two by hiving off its prized smartphone division from the rest of the business, to enhance its share price and allow heirs to the Lee family founders to assume a leadership role.
The radical restructuring has been put forward by US activist hedge fund Elliott Management and will be considered by Samsung’s board of directors tomorrow, according to reports in Seoul Economic Daily.
Should this meeting ok the plans, it would see Samsung Electronics separate out into a holding vehicle which would own the company’s investments with day-to-day business conducted by a new operating company. It would also release a $26bn special dividend, return at least 75 per cent of cash flow to investors and see new independent directors appointed.
These plans are being formulated against the backdrop of the elevation of Jay Y. Lee to the head of the company after his father, Lee Kun-hee suffered a heart attack in 2014.
Samsung has not yet commented on the reports but speculation contends that Lee and his two sisters are moving to ensure a stable transfer of control.