Samsung Shareholders Back $8 Billion Merger, in Blow to U.S. Hedge Fund2015.07.

ผู้เขียน หัวข้อ: Samsung Shareholders Back $8 Billion Merger, in Blow to U.S. Hedge Fund2015.07.  (อ่าน 909 ครั้ง)


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SEOUL—The Samsung conglomerate's controlling Lee family scored a major victory Friday over U.S. hedge fund Elliott Associates LP, as shareholders approved an $8 billion merger of two Samsung affiliates designed to solidify heir apparent Lee Jae-yong's grip on the conglomerate's crown jewel, Samsung Electronics Co.

But the merger, which passed with 69.5% of the shareholder votes cast after a bitter, weekslong fight against Elliott, won't put a stop to the pressures on Mr. Lee, who now faces increased expectations from angry minority shareholders as well as a potentially long legal battle with the hedge fund.

The merger between the Samsung conglomerate's de facto holding company, Cheil Industries Inc., and its construction-and-trading arm Samsung C&T Corp., will help streamline Samsung's convoluted ownership structure, which consists of about 70 affiliates tied together by a complex web of cross-shareholdings.

Through the merger, Mr. Lee, who has a 23% share of Cheil Industries, will now have greater control over Samsung C&T's 4.1% stake in Samsung Electronics, the world's largest handset maker by sales. The heir apparent is seeking to increase his influence on Samsung Electronics ahead of an expected inheritance from his ailing father, Samsung chairman Lee Kun-hee.

The elder Mr. Lee owns a 3.4% stake in Samsung Electronics.

Presuming Elliott isn't able to nullify the merger in the courts, as it is expected to try to do, the focus will quickly turn to Samsung SDS Co., another affiliate in which the younger Mr. Lee holds an 11% stake.

Analysts and investors have long predicted that Mr. Lee will seek to combine Samsung SDS with Samsung Electronics eventually, which would further boost Mr. Lee's stake in Samsung Electronics. Samsung SDS shares shot up 9.4% on Thursday, though they slipped Friday after the shareholder vote.

The merger vote comes after a heated six-week clash between Samsung and Elliott, as both sides vied to win the support of the domestic shareholders and foreign institutions that hold more than half of Samsung C&T's shares.

Elliott, which will see its 7.1% stake in Samsung C&T diluted in the merger, could challenge the validity of the merger. In recent months, the New York hedge fund bought 1% stakes in two Samsung affiliates that have stakes in Samsung C&T, and which voted in favor of the deal, according to a person familiar with the matter.

Those 1% stakes give Elliott the right to sue on behalf of the companies, which Elliott could argue wasn't acting in the best interest of its shareholders in backing the merger.

Under the terms of the merger, Samsung C&T shareholders will receive 0.35 Cheil Industries share for each Samsung C&T share. The new company, which will retain the Samsung C&T name, will relist on Sept. 15 after legally merging on Sept. 1.

Write to Jonathan Cheng at and Min-Jeong Lee at

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July 17, 2015 00:00 ET (04:00 GMT)
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