The shareholders of shipbuilder Samsung Heavy Industries and onshore plant builder Samsung Engineering Monday approved the merger of the two Samsung units for creating a global plant construction giant.
The merged shipbuilding entity will be launched Dec. 1, Samsung Heavy officials said.
The two firms announced their plans to merge on Sept. 1 as part of the Samsung Group’s business portfolio reorganization, which was apparently linked to the ownership succession.
The Samsung corporate flag flies at the group’s headquarters in southern Seoul. (Yonhap)
According to the plans approved by the shareholders, the shipbuilding arm of Samsung Group will issue new shares to absorb the group’s engineering arm at a price of around $2.5 billion. These new Samsung Heavy shares would be offered to Samsung Engineering shareholders at an exchange ratio of 2.36 to 1.
In an effort to ease investors’ concerns over the merger, Samsung Heavy CEO Park Dae-young on Monday spoke of the synergy effect the deal would create.
“With this merger, Samsung Heavy would be able to distinguish itself from rivals by offering a total solution to offshore platform and plant construction projects,’’ Park said during the shareholders’ meeting. Until now, Samsung Heavy had outsourced its design work due to the lack of engineering capacity.
“We expect sales of the merged company to reach 40 trillion won by 2020,” he added.
Ever since the merger announcement, the local stock market has been wary about the future of the two Samsung companies. Over the past month, the share prices of both Samsung Heavy and Samsung Engineering have been pared by 20 percent.
Hit by the decline in stock prices, institutional investors such as the National Pension Service on Monday opposed the deal.
Under local laws, shareholders who are against a merger can exercise their rights to request the merging companies to buy back their shares.
NPS, as the largest institutional shareholder of not only Samsung Heavy but also Samsung Engineering with a 5.91 percent stake and 6.59 percent stake, respectively, has been losing a lot of money on the falling stock prices of the two firms.
“The company will decide whether to ask the two Samsung units to buy back our shares by Nov. 17,’’ Lee Chul-hee, an NPS spokeswoman said.
By Seo Jee-yeon (
jyseo@heraldcorp.com)
