April 26, 2024

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[THE INVESTOR] Samsung Electronics said on Nov. 29 that the company will review diverse measures to elevate shareholder value, including splitting into holding and operating firms and the latter’s overseas listing.

“We have hired outside advisors to look into diverse measures. The review process will take at least six months,” the company said in a regulatory filing with the Korea Exchange. 

The Korean tech giant also pledged to pay out 50 percent of its free cash flow as dividends this year. The total dividends are expected to increase 30 percent to 4 trillion won (US$3.4 billion) compared to 3.1 trillion won last year.

The new shareholder policies come amid growing pressure from Samsung investors to modernize its organizational structure and share more profits. US activist hedge fund Elliott Management also made similar proposals last month.

The new measures, among others, are expected to pave the way for a pending leadership transfer at the nation’s largest conglomerate.

The heir apparent, Samsung Electronics Vice Chairman Lee Jae-yong has raised his stake at the flagship electronics unit of Samsung Group. After the possible split-off, Lee is likely to seek a higher stake in the holding company that would allow him to wield more power across other affiliates.

Lee, together with his father, the ailing Samsung patriarch Lee Kun-hee, owns less than 4 percent stake in the company. The combined favorable stake, including those owned by other Samsung companies, is estimated to be about 18 percent.

By Lee Ji-yoon (jylee@heraldcorp.com)