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Published on November 29th, 2016 | by The GC Team

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Samsung considers company split

Samsung Electronics today announced a roadmap of actions with the objective of enhancing the company’s long-term value for shareholders.

The move follows pressure on the South Korean manufacturer from US hedge fund Elliott Management, which called for the firm to split into a holding unit for ownership purposes and a separate operating company to boost its share price.

Samsung today said that it would consider the possibility of creating a holding company structure and the potential benefits and feasibility of listing the company’s shares on additional international exchanges, but no decision would be made until a review of its corporate structure by external advisors has been conducted. The process is expected to take at least 6 months.

“We are committed to enhancing sustainable long-term value for our shareholders and to remaining good stewards of capital,” said Dr. Oh-Hyun Kwon, Vice Chairman and CEO of Samsung Electronics.

“Today’s announcement extends the actions we initiated last year and represents the next phase in the evolution of our shareholder policy and governance.”

Samsung said the company’s Board of Directors is pursuing plans to invite new independent board members with international corporate experience, and it will strengthen corporate governance procedures by creating a new Governance Committee comprised solely of independent board members.

The company also said it will allocate 50% of free cash flow to shareholder returns for 2016 and 2017 and increase total dividends in 2016 by 30% compared with 2015, bringing the annual dividend amount to 4 trillion won. The remaining portion of 50% of free cash flow after the dividend payouts, plus 0.8 trillion won from 2015, will be used to repurchase shares, starting at the end of January 2017.

 

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