Samsung Group announced yesterday the sale of stakes in four petrochemical and defense affiliates for US$1.7 billion as the South Korean giant steps up restructuring efforts ahead of a generational ownership succession.
The sale to the Hanwha Group, which has major petrochemical holdings, is expected to be finalized in the first half of next year, Samsung said in a statement.
The deal involves Samsung Electronics and other group affiliates selling their combined stakes in defense firm Samsung Techwin and in Samsung General Chemicals.
A 50 percent stake held by Samsung General Chemicals in its joint venture with the French energy giant Total, called Samsung Total, is also to be sold to Hanwha, along with Samsung Techwin’s 50 percent holding in a joint venture with French defense firm Thales.
It marks the first sale of Samsung affiliates since the group was forced to shed its struggling auto unit in 1997, during the Asian financial crisis.
Samsung comprises dozens of units — including Samsung Electronics, the world’s top maker of mobile handsets and TVs — that altogether earn revenue equal to about 20 percent of South Korea’s annual economic output.
The family-run group chaired by Lee Kun-hee has merged, broken out or newly listed some of its key units in recent years, as he prepares to hand over control to his son, J.Y. Lee.
The founding Lee family has been under growing state pressure to unravel its complex web of shareholdings and make Samsung’s governing structure more transparent.
STREAMLINING
The sell-off announced yesterday indicates a desire to streamline the behemoth to concentrate on its key profit-making units, Seoul-based Kium Securities analyst Kim Ji-san said.
“The deal shows Samsung is determined to shed non-core units deemed not competitive enough globally and to focus on key businesses like electronics, finances, construction and engineering,” Kim said.
Samsung Techwin, a developer of security equipment and aerospace technologies, reported a net profit of 133 billion won (US$120.1 million) last year, but has amassed a net loss of 14.5 billion won for the first three quarter of this year.
The conglomerate’s restructuring has not always been smooth sailing.
Last week, the group was forced to scuttle an attempted merger between two major units — Samsung Heavy Industries and Samsung Engineering — due to the spiraling cost of buying back stock from shareholders opposed to the deal.
SHARE BUYBACK
Separately yesterday, Samsung Electronics announced a share buyback plan valued at 2.2 trillion won — a move aimed at appeasing shareholders frustrated with a slumping share price.
The buyback, set to run from today until February, involves 1.96 trillion won worth of common shares and 229.5 billion worth of preferred shares, the firm said in a regulatory filing.
The announcement came after trading closed on Seoul’s stock market.
The division has been under growing pressure to boost returns for shareholders, including by increasing dividends.
Samsung Electronics’ shares rose 0.9 percent to close at 1,201,000 won in Seoul, before the buyback announcement. The stock was bid at 1,260,000 won in after-hours trading.
The share price has tumbled more than 10 percent this year, as growth in the key smartphone business began to lose steam, sapping profits.
Samsung Electronics last month reported its smallest quarterly profit in nearly three years.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy