There is growing market speculation that Samsung Group is considering selling off its advertising unit Cheil Worldwide as part of its ongoing business restructuring led by Samsung Electronics vice chairman and heir apparent Lee Jae-yong.

Over the past weeks, French ad giant Publicis Groupe has been rumored to have evinced interest in buying all or a controlling stake in Cheil, which has a market value of $1.9 billion.

Cheil, which rarely responds to market rumors, said Wednesday in a regulatory filing: “We are discussing partnerships with global ad companies but nothing has been decided.”

Currently, Samsung companies, including Samsung C&T and Samsung Electronics, own a combined 28.56 stake in Cheil, together with treasury shares of 11.96 percent.

Cheil’s planned sale of its office building, adjacent to the headquarters in Itaewon, central Seoul, also sparked renewed speculation. The company announced Wednesday it would sell the building, owned by its Chinese unit Pengtai, to Samsung C&T for 25.6 billion won ($20.8 million) to secure cash for investments.

Cheil, the nation’s No. 1 ad firm, posted 2.78 trillion won in revenue and 948.7 billion won in operating profits last year. The company acquired Samsung Group’s sports business division late last year.

But concerns have also been mounting about the company’s profit sources that are largely dependent on its sister firm Samsung Electronics.

“In order to reduce its dependency on Samsung Electronics, Cheil has poured resources into overseas business. But no tangible results have been witnessed,” said an industry source who declined to be named.

Industry watchers said the potential purchase by Publicis, one of the world’s top three ad firms, is expected to be a boon for Cheil to elevate its brand name globally and secure more clients other than Samsung.

“Publicis may be interested in strengthening ties with Samsung Electronics as well as taking advantage of Cheil’s presence in China,” he said.

Despite possible business synergies, Cheil shares tumbled Wednesday on business uncertainties in the coming months. On Thursday, the prices slightly rebounded 1.7 percent to close at 17,950 won. 

Opinions are still mixed about Samsung’s complete sell-off of Cheil. But industry watchers said the group would continue efforts to reduce the dependency of component and service business affiliates on Samsung Electronics, the group’s crown jewel.

In 2014, the combined operating profits of Samsung’s 17 listed companies were 39.8 trillion won, while Samsung Electronics alone made up 36.7 trillion won.

Their internal transactions are also growing together with Samsung Electronics’ business expansion.

“The Samsung heir who has led the group’s business restructuring for better profitability is likely to come up with measures to reduce the dependency on Samsung Electronics,” said another source. 

By Lee Ji-yoon (jylee@heraldcorp.com)