Samsung C&T co-CEO Kim Shin said Wednesday that the proposed merger with Cheil Industries is certain to happen if the National Pension Service supports the move.
The NPS, the nation‘s largest investor, holds 11.61 percent of Samsung C&T. Of that, 11.2 percent count for its voting rights.
Samsung C&T co-CEO Kim Shin Samsung
“If the NPS agrees, then I am certain the merger will happen,” he told reporters, adding that he anticipates the state-run fund to make a “positive conclusion.”
Kim also said the company has been gathering support from both overseas and local stakeholders, and that the merger would bring long-term benefits to the company and investors.
The company claimed that the proposed merger would allow it to raise its annual sales to 60 trillion won ($53 billion) by 2020. The company also said that the merger would allow the new entity to have a diverse portfolio that would give it better future prospects and the ability to weather downturns in specific industries.
The move, however, has been opposed by the U.S.-based hedge fund Elliott Associates from the beginning, which claims that it is unlawful and that the merger swap ratio of 1 to 0.35 in favor of Cheil Industries is unfair.
The hedge fund’s efforts to hamper the merger process so far has not yielded much result, with Seoul courts throwing out its request for an injunction to stop the July 17 shareholders’ meeting.
On Wednesday, Elliott sent out letters to all Samsung C&T shareholders urging them to oppose the merger.
Elliott’s stance did, however, gain some support from Institutional Shareholder Services, which took a negative view on the proposed merger.
However, it is yet unclear which way the National Pension Fund will lean.
While the Samsung C&T CEO said the company has been working to persuade the NPS, a local securities firm Wednesday said it may not work out in favor of Samsung.
Citing the NPS’ past decision to oppose a similar deal within SK Group, Hanwha Investment chief researcher Kim Chul-beom said the merger may face difficulties.
In addition, Kim also projected that foreign investors, who together hold about one-third of Samsung Group’s trading and construction arm, are likely to adhere to ISS’ report.
By Suk Gee-hyun (
monicasuk@heraldcorp.com)