Samsung Group announced Tuesday the merger of two major affiliates, as the South Korean business giant accelerates restructuring efforts ahead of a generational power transfer within the founding Lee family.
The all stock deal, approved by the boards of both companies would see Samsung’s de facto holding company Cheil Industries -- which has interests from fashion to theme parks -- acquire general trade and construction affiliate Samsung C&T.
The merger, which is expected to be completed by September pending shareholder approval, will see Cheil offer 0.35 new shares for each Samsung C&T share.
The two companies are both listed on the Seoul stock market, with Cheil valued at 22 trillion won (US$2 billion) and Samsung C&T 8.6 trillion won as of Tuesday.
The combined company -- to be called Samsung C&T -- will target annual sales of about 60 trillion won in 2020, compared to their combined sales of 34 trillion won in 2014, Samsung said in a statement.
“The two companies expect to create synergy by combining their construction businesses, while Samsung C&T’s global network will help develop new opportunities overseas for Cheil’s fashion, resort and catering businesses,” the statement said.