Samsung C&T, the construction and trading arm of Samsung Group, is taking the final steps to complete its $8 billion merger plan with sister firm Cheil Industries by buying back shares from dissenting investors.

The company said Friday shareholders who opposed the merger deal had exercised appraisal right to request Samsung C&T to repurchase 11.7 million shares, about 7.5 percent of stakes in the company.

Local laws give shareholders the right to sell shares they held before a merger announcement if they are against it.

The company proposed to pay 57,234 won ($49.08) per share. The total amount of share buyback claims stood at around 670 billion won, which is far less than half the 1.5 trillion won limit set by the company, together with Cheil, that would lead them to call off the deal.

Elliott Associates, the U.S. hedge fund that launched an aggressive campaign to block the merger citing an unfavorable merger swap ratio, was one of the big sellers, dumping its 4.95 percent stake worth 442.6 billion won.

Its remaining 2.17 percent stake was not included because the stock was acquired after the merger was announced in May.

“Considering changes in stock prices, Elliott is expected to lose some 20 billion won. But it is also likely it has already secured profits from derivatives,” said an industry source.

Even though Elliott reiterated in a Friday statement that the partial stake sales were part of its plan to stop the merger from going ahead, industry watchers predicted the fund’s ultimate exit was imminent.

They said its stake in the merged entity will be reduced to a tiny 0.63 percent, not enough to wield any influence into the management.

Despite some pending court rulings, the new entity, to be named “Samsung C&T,” is expected to be launched on Sept. 1 as planned, becoming the de facto holding company of the nation’s largest conglomerate.

The merger comes at a crucial juncture as Samsung is preparing for a leadership transition from the ailing Samsung patriarch Lee Kun-hee to his son and Samsung Electronics vice chairman Lee Jae-yong.

Following the merger, the junior Lee will hold a 16.5 percent stake in the new company, which allows him more control over Samsung companies, including the crown jewel Samsung Electronics. 

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