One Year Gone
Samsung Electronics Vice Chairman Lee Jae-yong has changed a lot of things in the Samsung Group during the one year in which chairman Lee Kun-hee has remained in the hospital due to an acute myocardial infarction.
First of all, the Samsung Group sold four of its subsidiaries – Samsung General Chemicals, Samsung Total, Samsung Techwin and Samsung Thales – to the Hanwha Group in November last year. In addition, Cheil Industries and Samsung SDS were listed, while the fashion and chemical divisions of Cheil Industries were separated from each other so that the latter was acquired by Samsung SDI. Samsung Display disposed of its shares in Samsung Corning Precision Materials and the possibility of a merger between Samsung Heavy Industries and Samsung Engineering is still open, although it failed once due to the opposition of shareholders.
Moreover, various subsidiaries of the Samsung Group are currently restructuring themselves. Samsung Electro-Mechanics set up a new business team in charge of auto parts production and development, while Samsung SDI disposed of its plasma display panel business. Samsung Display spun off the OLED business unit from its mobile display division, so it can cover larger display panels.
The change during the year is characterized by aggressive M&As. Samsung Electronics has been engaged in eight M&A deals since May last year, equivalent to 36.3 percent of its total M&A attempts made since 2007. Most of the deals targeted foreign companies, focusing on new growth opportunities in such fields as B2B transactions, the Internet of Things, and fintech, rather than the expansion of existing businesses.
The vice chairman has been well-received. Samsung Electronics has succeeded in overcoming its earning shock of the third quarter of 2014, and the majority of its employees are favorable for their new leader.
Still, it is pointed out that the Samsung Group needs to adopt a holding company structure if the corporate succession process is to be smooth. Under the circumstances, rumors are circulating that Samsung Electronics will establish Samsung Electronics Holdings for a merger with Cheil Industries. Samsung has mentioned nothing about the issue, though.