Samsung creates huge ￦27T unit
The merger between the construction and trades arm of Samsung Group with the fashion and IT material manufacturer was first announced four months ago.
The combined unit will become the country’s fourth-largest listed company, with its market cap estimated to be around 27 trillion won ($23 billion).
Putting aside the business operations issue, the company has symbolic significance as a de facto holding company of the country’s largest business group, with Jay Y. Lee, the scion of Samsung’s founding family, taking over as the largest shareholder.
The merger between Samsung C&T and Cheil is considered by many as a maneuver to help the Lee family exert more influence over Samsung Electronics as part of a generational change from the now-hospitalized Lee Kun-hee to his 47-year-old son, Jay Y. Lee.
The merged company is expected to complete registration of the new unit by Sept. 4 and will be relisted on the stock market on Sept. 15.
Samsung C&T will be headed by four CEOs in different divisions, with Choi Chi-hun in charge of construction, Kim Shin in trading and investment, Yoon Joo-hwa in the fashion business and Kim Bong-young in the resort and retail sector. CEO Choi will serve as chief of the board.
To better put together and rearrange the businesses, Samsung C&T has formed a committee comprising the four heads. Also invited to the committee are the two daughters of Chairman Lee Kun-hee, with each having a 5.5 percent share in the new unit.
Lee Boo-jin, CEO of Hotel Shilla, has doubled as a senior vice president of Everland, Samsung’s resort unit, which is now part of the combined unit. She also serves as an advisor to Samsung C&T.
Lee Seo-hyun, the younger daughter, is the head of business strategy in the fashion businesses of the new Samsung C&T.
The Samsung affiliate has also outlined ambitious sales targets and profit margins, arguing that the merged company will have 60 trillion won in sales by 2020 and 4 trillion won in pre-tax profits.
Of the many sectors that Samsung C&T engages in, most are interested in how the company will develop the biomedical industry.
Samsung said that it will further enhance the biotechnology business under the merger.
Samsung currently owns 4.9 percent of Samsung Biologics while Cheil Industries owns 46.3 percent. The new company will own a majority of Biologics.
Samsung Biologics was founded in 2011 as a joint venture with the global biopharmaceutical company Quintiles, which now owns 2.5 percent of the company.
Biologics and another Samsung biotech company that specializes in similar products, Samsung Bioepis, earlier this month told investors their goal was to make Samsung No. 1 in world biomedical and pharmaceutical manufacturing within five years.
Samsung Bioepis is planning to sell its “biosimilar” products next year and plans to list on the Nasdaq.
The new company also vowed to bolster the fashion business using an extensive trading infrastructure by Samsung C&T.
Samsung C&T is set to hold an inaugural ceremony to celebrate the launch of the combined unit today at the company’s office in Seocho District.
BY PARK EUN-JEE [firstname.lastname@example.org]
with the Korea JoongAng Daily
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