The $8bn deal will see construction company Samsung C&T taken over by holding company Cheil Industries, another part of the Samsung group. At stake for Samsung is a deal that is key to cementing the founding Lee family’s control as management succession looms, consolidating stakes in affiliates including tech giant Samsung Electronics.
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Shareholders in Cheil Industries approved the merger earlier on Friday. The deal required a two thirds majority for approval.
Spearheading opposition to the merger is the United States of America hedge fund Elliott Associates, which is the third-largest shareholder in C&T and has unsuccessfully moved the courts to block the deal on the grounds that it undervalues the construction firm. That view was shared by an impassioned group of home retail buyers, who noticed a merger that bolsters the Lee household’s management of Samsung Electronics Co as driving roughshod over minority pursuits.
June 7 – Elliott sends a letter to Korea’s National Pension Service, asking the agency to vote against the merger at a July 17 shareholder meeting. Nor apparently had anyone convinced him that Samsung would surely round up the shareholder votes to get what it wanted. “According to a source in the finance industry, Jews have a robust network demonstrating influence in a number of domains”, the South Korean financial publication MoneyToday said last week. In contrast, some think that Samsung is about to face its greatest challenge yet.
Korea’s biggest proxy fight began in May when Cheil announced it would buy C&T, the country’s biggest builder. “It’s too unfair”, an elderly shareholder told the meeting before the vote.
But the outcome was by no means certain and Samsung C&T pulled out all the stops to persuade stockholders to vote in favour of the deal.
South Korea has asked the North Korean Ministry of the People’s Armed Forces to send a vice minister to the Seoul Defense Dialogue scheduled to run from September 9-11 at a hotel in the capital city, a ministry official said. “Samsung Group is a term to conveniently refer to a group of companies that are tied together by their corporate history”.
“Samsung Group is not a legal entity”, the conglomerate’s website explains.
With few predicting the result with certainty, Samsung engaged in an all-out effort to drum up support.
June 24 – Elliott asks Samsung C&T shareholders to delegate their voting rights. It has also mobilized employees to visit shareholders with mango juice and watermelon. Some shareholders complained Samsung had shared their private information with Samsung employees. Critically, it also gives them a tighter grip on Samsung Electronics, the $184 billion smartphone maker, which is roughly 4 per cent owned by C&T.
Few bought Samsung’s argument that the takeover would create business benefits.
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The restructuring would allow Samsung to transfer more power to Lee Jae-yong, the son of the conglomerate’s chairman, Lee Kun-hee, who has been incapacitated since a heart attack in May 2014.
