[Aju News DB]
Samsung SDS Monday ruled a possible merger with Samsung C&T Corp., the trading arm and de facto holding company of South Korea's largest family-run conglomerate, Samsung Group.
In response to rampant market speculation, Samsung SDS said it was considering the spinoff of its logistics business but stressed that the separated entity would not be sold to or merged with Samsung C&T.
The proposed spinoff is part of rigorous corporate restructuring pushed by the conglomerate to put Samsung Electronics vice chairman J. Y. Lee onto the center stage. Samsung Electronics holds 22.6 percent of Samsung SDS, and Samsung C&T controls 17.1 percent. Jay Y. Lee is the third-largest shareholder with a 9.2 percent stake.
The proposed spinoff has fueled market speculation about a possible merger with Samsung C&T. Minority shareholders have opposed the spinoff, urging Samsung SDS to buy back shares or pay interim dividends.
In September last year, the group completed a merger of Cheil Industries and Samsung C&T, with the merged entity keeping the name of Samsung C&T. 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 merger 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.
Aju News Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
