Shuffling of units in Samsung Group rumored

Home > Business > Industry

print dictionary print

Shuffling of units in Samsung Group rumored

Samsung SDS, Samsung Group’s information and communications technology unit, is considering spinning off a number of its units and possibly merging them with other subsidiaries of the group.

“It is true that we are considering spinning off some business segments,” the company said in a regulatory filing announced Friday.

Earlier this week, it was rumored that the business process outsourcing of Samsung SDS’s logistics department will be acquired by the trading and investment division of Samsung C&T.

Industry insiders point out that the trading and investment division of Samsung C&T is planning to move to Jamsil-dong in southeastern Seoul, where Samsung SDS headquarters is located.

But Samsung SDS declined to further comment on that rumor.

Samsung C&T, which itself is a merger of Samsung C&T and Cheil Industries, is the de facto holding company of the nation’s largest conglomerate.

Samsung C&T also refuted such speculation, saying it is “not looking into a merger with Samsung SDS’s logistics segment.”

The rumored merger was seen as part of a restructuring plan by Lee Jae-yong, the de facto leader of Samsung Group, to streamline affiliates’ portfolios and focus on what each does best.

It was claimed that a merger of Samsung C&T’s trading sector and Samsung SDS’s logistics outsourcing capabilities would create synergy and reinforce the logistics business of Samsung Group as a whole.

“If Samsung streamlines its logistics businesses, Samsung C&T, the de facto holding company of the group, will be able to strengthen its business portfolio,” said Yoon Tae-ho, an analyst at Korea Investment & Securities.

“It seems they are transfusing Samsung C&T with new businesses to reinforce its profit-generating structure.”

Some analysts say that merging a segment of Samsung SDS with Samsung C&T, which are main players in Samsung Group, will allow Lee to solidify his control over the group.

SDS’s information technology outsourcing segment was also reported to be acquired by the group’s flagship business, Samsung Electronics.

An official announcement is expected after Samsung SDS holds a board meeting on Wednesday.

The rumors caused Samsung SDS shares to plunge 10.8 percent. Shares closed at 149,000 won ($125.45) on Friday. Meanwhile, shares of Samsung C&T soared 7.02 percent to close at 122,000 won.

Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)