Samsung to Merge Subsidiaries Cheil Industries and Samsung Construction
D-Bo, May 27, 2015, 9:17 a.m.
Samsung on Tuesday announced it will merge its fashion, resort and food services subsidiary Cheil Industries with Samsung Construction and Trade by Sept. 1. The merger is seen as the final step in a corporate streamlining project by Samsung heir Lee Jae-yong as the nominal chairman, his father Lee Kun-hee, remains in a coma.
Cheil Industries and Samsung C&T agreed to the merger in board meetings on Tuesday. Cheil will issue new shares and allocate them to Samsung C&T shareholders in accordance with a merger ratio of 1:0.35. As a result of the merger, the owner family will secure a combined 30.4 percent of total shares.
The merged company will be called Samsung C&T, even though Cheil has a higher market cap and will effectively be absorbing the builder. Samsung said the merger will create synergy by combining the construction units of both companies, adding that Cheil's fashion and food service businesses will use Samsung C&T's global network to foray into overseas markets.