Samsung is still hopeful that the merger goes through
Samsung Electronics is quite active in the market these days. The company is not only occupied in the smartphone business but it is also working out of it as well. The possible Samsung merger is recently all over the news. Reuters reported that the holding company of Samsung Electronics Ltd., Cheil Industries Inc. is seeking to gain support for its possible merger proposition valued at $8 billion. The proposed merger is of Cheil Industries Inc. with the South Korean’s trading and construction business, Samsung C&T Corporation.
According to a report regarding latest Samsung news, “Cheil Industries is willing to boost the dividend payout ratio, and establish a corporate committee on the condition that shareholders approve the debatable merger. Cheil Industries also promised to consider future buyback options, after the deal is officially completed.” There is no doubt in the fact that Cheil Industries offered a decent and a pleasant deal to Samsung and the smartphone maker is looking forward to this merger in the coming times.
The company is quite busy in the market as it plans to file its biopharmaceutical company for an initial public offering (IPO) on NASDAQ stock exchange in the coming times. These talks are appealing the shareholders hence it is hopeful to obtain the approval from the investors and shareholders for the merger.
The news of the merger became public right after the recent two mergers of Samsung affiliated. In May, the company planned to announce a merger between Techwin unit and its chemical business. For that, Samsung sold nearly 57.6 percent stakes in Samsung SDI Chemical and a 32.4 percent stake in Techwin, as reported by Samsung news. These mergers and decisions were aimed to boost the efficiency and focus more on its high priority business that is Samsung Electronics.
Further reports suggest “Earlier this month, Elliot Associates unveiled its 7.1% stake in Samsung’s construction business, and pursued a court action to hinder the ongoing deal discussion with Cheil Industries. It did so because it claimed the merger would be unfair to Samsung C&T Corporation's shareholders.”
Cheil Industries proposed a fair deal by offering more dividends corporate governance, and other undisclosed compensations as well if the merger is approved. Furthermore, in order to complete an all stock takeover of Samsung’s construction and trading business (C&T), ‘Cheil Industries promised to increase the dividend payback proportion from 21% in 2014, to 30% by 2020. On a forecasted pre-tax profit of over $3.5 billion for 2020, the promised dividend would be $4.29 per share.’
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