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[DECODED: SAMSUNG] Samsung's succession scenarios

[THE INVESTOR] Samsung's succession has been set in motion, with Samsung Group chairman Lee Kun-hee out of the picture since 2014 due to health problems.
His three children have consequently been allotted key roles within Samsung, but there is still speculation about exactly how the group will be reshuffled.

The following are some likely scenarios provided by local opinion leaders. 

(From left) Samsung Electronics vice chairman Lee Jae-yong, Hotel Shilla CEO Boo-jin, Samsung C&T fashion chief Seo-hyun.
(From left) Samsung Electronics vice chairman Lee Jae-yong, Hotel Shilla CEO Boo-jin, Samsung C&T fashion chief Seo-hyun.

Jeong Dae-ro, Mirae Asset Daewoo Securities 

A holding company (for nonfinancial businesses) will be carved out of Samsung Electronics . Samsung SDS ’ IT-business spinoff will merge with the envisioned new entity, Samsung Electronics Holdings, which will give the heir more control over Samsung Electronics. Converting Samsung C&T into a holding company for the entire group is optional.  

Kim Haney, Daishin Securities

Samsung Electronics Holdings will merge with Samsung C&T in the final step of Samsung Group’s succession process. Prior to this merger, the heir will likely seek to boost C&T’s market valuation in order to minimize the dilution of his control.

Rep. Chae Yi-bai, the People‘s Party 

Samsung may or may not convert Samsung C&T, the group’s de-facto holding firm, into a legally-recognized holding company. Nevertheless the group will seek to align business units in a shape that looks similar to a holding structure. Samsung Group will then be divided into three, each to be run by the three children of chairman  Lee Kun-hee, just like the old LG Group split into LG, GS and LS. 

Yoon Tae-ho, Korea Investment & Securities 

The most likely scenario is a merger between Samsung Electronics Holdings and Samsung C&T. But the group will seek a soft landing and unlikely to push for succession steps that will maximize the controlling family’s control at the expense of other shareholders.

Kim Sang-jo, Hansung Univ. professor and director of Solidarity for Economic Reform
Samsung Group will convert to a holdings company structure in three stages. 1) A financial holding company will be created within 1-2 years for the group’s financial business units. 2) A separate holdings firm will put Samsung Electronics and other non-financial affiliates under its control. 3) The two, each governing Samsung‘s financial and non-financial businesses, will be linked with the creation of a new holding company, if a law is enacted to allow this, or horizontally through ownership of shares. 

By Lee Sun-young/ The Korea Herald (