Cheil Worldwide announces breakdown in talks with French firm

By Park Sae-jin Posted : June 13, 2016, 18:25 Updated : June 13, 2016, 18:25

[Courtesy of Cheil Worldwide]


Cheil Worldwide Inc, a key advertising arm of South Korea's iconic giant Samsung Group, on Monday announced the rupture of negotiations with a French advertising firm.

Cheil had been involved in talks with Publicis Groupe SA of France as part of efforts by the country's biggest conglomerate to accelerate corporate restructuring to put group heir and Samsung Electronics vice chairman J. Y. Lee onto center stage.

In a regulatory filing, Cheil said it has not been invlolved in negotiations with other potential buyers following the rupture of talks between "main shareholders and a global agency" which refers to the French firm.

In September last year, the group completed a merger of its de-facto holding company Cheil Industries and Samsung C&T, with the merged entity keeping the Samsung C&T name.

The deal helped the founding Lee family cement control by allowing the group to strengthen its cross-ownership structure since the merged affiliates had stakes in other companies.

The family-controlled group has shed thousands of jobs, reflecting its struggle to cut costs as its flagship Samsung Electronics, one of the world's largest mobile phone makers, was hit by plunging profitability of its handset business due to competition with Chinese players rolling out price-competitive models.

The merger in September was aimed at paving the way for the transfer of ownership from the group's ailing head Lee Kun-hee to his only son who has struggled to streamline the group's portfolio since his father was hospitalized in May 2014.

Samsung has also sought to sell non-core units in an effort to raise funds for massive inheritance tax at the risk of reducing group-wide cross-holdings, which have been used by South Korean conglomerates to maintain their control with minor stakes.

Aju News Lim Chang-won = cwlim34@ajunews.com
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