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Samsung's shipbuilding, engineering units to merge

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Published : 2014-09-01 09:47
Updated : 2014-09-01 10:47

Samsung Group's shipbuilding and engineering units on Monday announced a plan to merge within this year as the nation's top conglomerate speeds up a restructuring drive.

The stock exchange ratio has been set at 2.36 shares of Samsung Engineering Co. per one Samsung Heavy Industries Co. share. The merger is scheduled to be completed by Dec. 1. 

Samsung Heavy said in its regulatory filing that it aims to combine its shipbuilding and marine plant business with Samsung Engineering's competitive edge in designing, purchasing and managing plant-related projects.

"We will gain top-tier competency in the marine plant industry, which has been cited as one of the core markets of the future,"

Samsung Heavy said in the filing. "(The company) will grow to become a top-class plant builder that encompasses land and ocean."

The new entity, likely to adopt a new corporate name, is expected to turn into a comprehensive offshore plant builder with an annual revenue of 40 trillion won by 2020, soaring from 25 trillion won in 2013.

"Through the merger, the two have built ground to rise as a world-class engineering, procurement and construction firm," Samsung Heavy said in its release.

Samsung Group has been going through a series of business reshuffles after Lee Kun-hee, 72-year-old de facto head of the Samsung empire, was hospitalized in May after suffering a heart attack. 

In July, Samsung SDI Co., the group's battery unit, completed its merger with material divisions Cheil Industries Inc.

Samsung Everland Inc., which effectively serves as Samsung Group's holding company, changed its name to Cheil Industries this year after acquiring the fashion division of Cheil in September 2013. The new entity is currently seeking an initial public offering in the first quarter of 2015.

Samsung SDS Co., a key IT unit of Samsung Group, filed for preliminary examination ahead of its IPO this year.

Industry watchers see the events as a prelude to the group's management succession to the next generation of the owner family.

Stock listings will generate money that could be used to fund the children's stake purchases, tax payments and other costs needed to strengthen their standing in the group, the watchers said, adding the restructuring of affiliates will draw clearer lines between the main business portfolios going to each of Lee's three children. (Yonhap)

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