Samsung Life to sell portion of stake in Samsung Electronics
Samsung Life Insurance and its affiliate Samsung Fire & Marine Insurance will sell part of their 9.7 per cent stake in Samsung Electronics in a block deal amid growing regulatory pressure for the South Korean conglomerate to streamline its complex ownership structure.
The two financial units of Samsung Group will together sell a 0.45 per cent stake in Samsung Electronics, worth about Won1.2tn ($1.1bn), before the country’s stock market opens on Thursday, Samsung Life said on Wednesday.
“The two companies held a board meeting today and passed the block deal plan,” said a spokesman for Samsung Life.
Samsung Life has come under intense regulatory pressure in recent weeks to reduce its 8.3 per cent stake in Samsung Electronics, worth about $26bn, to below 3 per cent in order to comply with forthcoming amendments to the Insurance Business Act, which will further restrict insurers’ shareholdings in affiliates.
Kim Sang-jo, head of the country’s antitrust watchdog, has said Samsung Life should present its blueprint on how to sell down its stake in Samsung Electronics by the end of this year, saying the current ownership structure is “not sustainable”.
Investors are closely watching how Samsung’s financial units plans to sell the remaining stake in Samsung Electronics, the crown jewel of South Korea’s biggest conglomerate, which its founding family controls through a complex web of cross shareholdings despite their small direct stake in the technology giant.
In April, Samsung’s battery-making unit Samsung SDI sold its stake in the group’s de facto holding company Samsung C&T, worth about $526m, to trim its cross-shareholdings.
Shares of Samsung Electronics fell 3.5 per cent on Wednesday while Samsung Life shares rose 0.9 per cent and Samsung Fire shares fell 1.37 per cent. The benchmark Kospi Composite index closed down 1.96 per cent.
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