Samsung Electronics may split amid pressure over governance and dividends
Samsung Electronics has said it is considering splitting in two, to allow heir-apparent Lee Jae-yong to take over the firm from his father, Lee Kun-hee, and address governance concerns.
Samsung has also come under pressure from foreign investors, including the US hedge fund Elliott Management, to improve its corporate governance through the establishment of a holding company and to increase dividends for shareholders.
The move comes as it struggles to contain the fallout from a global recall of its Galaxy Note 7 smartphone prompted by exploding batteries.
Lee Jae-yong, the Samsung Electronics vice-chairman and heir-apparent. Photograph: Reuters |
Samsung said in a statement it would consider breaking the company into a holding firm and a producing and operating unit. It would take at least six months to study the option.
Analysts said a split would give Samsung Electronics’ vice-chairman, Lee Jae-yong, a tighter grip on the company through a holding firm.
Elliott and other investors have urged Samsung to set up a holding company as a way to address its complicated layers of cross-shareholdings with sister companies.
They also said the company should increase dividends for shareholders.
Samsung said it would increase per-share dividends by 36% this year to 28,500 won (US$24.38).