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Samsung to merge two major units

Staff writer |
Samsung Group announced the merger of two major affiliates. The all stock deal, approved by the boards of both companies, would see Cheil Industries acquire general trade and construction affiliate Samsung C&T.

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Samsung C&T has a four percent stake in Samsung Electronics, the group's flagship unit and the world's top maker of smartphones and mobile phones.

The merger, which is expected to be completed by September pending shareholder approval, will see Cheil offer 0.35 new shares for each Samsung C&T share.

The two companies are both listed on the Seoul stock market, with Cheil valued at 22 trillion won ($2 billion) and Samsung C&T 8.6 trillion won as of Tuesday morning.

The combined company which will take the Samsung C&T name will target annual sales of about 60 trillion won in 2020, compared with their combined sales of 34 trillion won in 2014, Samsung said in a statement.

"The two companies expect to create synergy by combining their construction businesses, while Samsung C&T's global network will help develop new opportunities overseas for Cheil's fashion, resort and catering businesses," the statement said.

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