Samsung Electronics reviews shift to holding company structure

Samsung Electronics reviews shift to holding company structure. November. 30, 2016 07:18. by Ji-Hyun Kim jhk85@donga.com.

Samsung Electronics will reportedly seek to introduce a holding company system at regular general shareholders’ meeting, which will be held around March next year. At a board meeting on Tuesday, the Korean tech giant adopted and announced plans to increase shareholder value that includes consideration of transition into a holding company.

“We are neutrally reviewing the possibility of creating a holding company structure, and the review process will likely take at least six months,” Samsung Electronics said in a conference call soon after a board meeting on Tuesday.

According to sources in the business community, however, Samsung Group is internally seeking to start steps to transform into a holding company from the general shareholders’ meeting in March next year, which is earlier than the timeline.

The announcement comes in response to a proposal of measures made by Elliot Management, a U.S.-based hedge fund, to the electronics giant to help increase its shareholder value that include transition into a holding company.

Samsung Electronics has decided to use 50 percent of its excess cash flow this year and next year to return earnings to shareholders, and increase its dividend by 30 percent this year from last year to pay out about 4 trillion won (3.41 billion U.S. dollars) in total.