SamMobile has affiliate and sponsored partnerships. If you buy something through one of these links, we may earn a commission.

News For You
News For You
Notifications

Samsung Electronics rejects holding company structure

Business
By 

Last updated: April 27th, 2017 at 06:35 UTC+02:00

Samsung Electronics received a restructuring proposal from US activist hedge fund and minority shareholder Elliott Associates which proposed that the company be split into two. It called for setting up an operational and holding company and listing the latter on external exchanges in order to significantly boost shareholder value.

Samsung took its time to study the proposal in detail and at its annual shareholder meeting last month said that it was not going to adopt a holding company structure for now. However, at that time, it didn't completely rule out the possibility.

It has done that today, though. Samsung has said that the company's Board of Directors has decided not to convert to a holding company structure.

A comprehensive review conducted with external advisors has revealed that a holding company structure will not strengthen the competitiveness of Samsung's business and may potentially weigh on its operations in the long-term.

The review also highlighted some issues that may crop up if the proposal is to be accepted. Creating a holding company would require divestments of equity stakes held by Samsung Electronics and its affiliates. This will require approval from directors and shareholders of all relevant companies and can thus not be implemented by Samsung Electronics alone.

Existing laws will also force the company's financial affiliates to divest part or all of their stakes. This might lead to volatility in the company's share price. The uncertainty of the legal and regulatory environment has also been deemed not conducive to such a major change.

Samsung has thus concluded that the risks and the challenging environment associated with a fundamental change in corporate structure would not be beneficial for enhancing shareholder value and sustaining growth for the business in the long-term.

It believes that the holding company structure does not have clear benefits compared to Samsung Electronics' current business structure.

Source Business Elliott AssociatesSamsung Electronics
Galaxy AI summarized

Scroll for more related content
News For You

You might also like

All the Cyber Week 2024 deals Samsung doesn’t want you to miss

All the Cyber Week 2024 deals Samsung doesn’t want you to miss

Samsung's Cyber Week sales event, which traditionally follows the Black Friday weekend, kicked off yesterday. For this Cyber Week, Samsung has refreshed some of its Black Friday deals and launched a bunch of new ones. The following list contains all the Samsung Cyber Week deals everyone should know about. Just a heads-up, the company says […]

  • By Mihai Matei
  • 3 days ago
Samsung trademarks ‘Moderate Bass’ for TVs and soundbars

Samsung trademarks ‘Moderate Bass’ for TVs and soundbars

We discovered a new trademark application Samsung filed with the UK Intellectual Property Office last week. The trademark concerns something Samsung calls “Moderate Bass.” In a broad sense, this new trademark applies to TVs, soundbars, speakers, and downloadable software for controlling TVs. Whatever it is, it seems like an audio technology or a setting that […]

  • By Mihai Matei
  • 4 days ago
The ultimate Samsung Holiday Gift Guide for 2024

The ultimate Samsung Holiday Gift Guide for 2024

The end of 2024 is over the horizon, and Black Friday has kicked off the holiday shopping season. For many, the time has come to prepare gifts for family and friends or to renew themselves with some of the latest tech available. If you're looking for a bit of inspiration for Samsung gift ideas, you've […]

  • By Mihai Matei
  • 7 days ago
All the Samsung Black Friday 2024 deals you don’t want to miss

All the Samsung Black Friday 2024 deals you don’t want to miss

Black Friday is here, and Samsung has launched a bunch of fantastic deals everyone should at least check out. Some of them are really quite incredible, like that Galaxy Z Fold 6 deal that shaves $800 off the phone's price with no trade-in. But there's more good stuff on Samsung's e-shop for Black Friday, so […]

  • By Mihai Matei
  • 1 week ago
This Samsung Jet stick vacuum deal is actually awesome

This Samsung Jet stick vacuum deal is actually awesome

Samsung offers several Jet Stick cordless vacuum cleaner models, but one that we've had our eyes on for some time is the Jet 75+. It's powerful, has an extra battery, and might be the best vacuum cleaner that can double as a car vacuum. It's also relatively affordable. Speaking of which, Samsung has launched a […]

  • By Mihai Matei
  • 1 week ago
Samsung makes big changes to top leadership in hopes of growth

Samsung makes big changes to top leadership in hopes of growth

There was an expectation that Samsung would shake things up significantly in its annual personnel reshuffle that started earlier this time around. The company today announced a major leadership change as it seeks a return to growth, particularly in the lucrative semiconductor segment. The announced changes primarily focus on the semiconductor business. Samsung says that […]

  • By Adnan Farooqui
  • 1 week ago