Samsung restructures as it plans for succession

Seoul

SAMSUNG Group's de facto holding company on Tuesday sought another cornerstone as it reconstructs South Korea's biggest conglomerate to smooth the path for management succession, offering more than US$8 billion to buy an affiliate with a key stake in flagship firm Samsung Electronics.

Cheil Industries Inc, with interests from construction to fashion, is offering new stock priced at about 8.9 trillion won (S$10.9 billion) to buy building firm Samsung C&T Corp. After recent market jitters on Samsung's overhaul, shares in both rose nearly 15 per cent - taking Samsung C&T's value beyond the offer price to about 10 trillion won. The move combines what analysts consider two key companies in the sprawling family-controlled conglomerate. It would also cement the position of heir apparent and Samsung Electronics vice chairman Jay Y Lee, likely to remain top shareholder of the merged entity, as Samsung prepares for the eventual transfer of control from ailing patriarch Lee Kun-hee to his children.