Samsung shareholders could prompt business split

Samsung Electronics has revealed that it is considering splitting itself into two separate companies, as the result of intense pressure from shareholders.

The South Korean tech giant will carry out a review to look at the implications of such a massive move, although in a statement it noted that such a review “does not indicate the management or the board’s intention one way or another.”


The suggestion that Samsung divide into two separate companies was first mooted by U.S. activist hedge fund Elliott Management back in October. The hedge fund suggested that Samsung could divide into a “holding vehicle for ownership purposes” and an operating company for the benefit of shareholders.

It also asked that Samsung pay a $26 billion dividend, agree to appoint independent directors, and return upwards of 75 percent of free cash to investors.

Samsung has had a tough 2016, not least with a costly recall of its disastrous Galaxy Note 7 smartphone and, soon after, a recall of 2.8 million washing machines in the U.S. after one unfortunate customer suffered a broken jaw when the top of their unit blew off.

Given that Samsung says that an external investigation into the implications of splitting into two companies will take at least six months, we won’t know the conclusions until roughly April 2017 at the earliest.

A tech giant splitting up wouldn’t be without precedent. Earlier this year, Google dropped a bombshell announcement by splitting into “a collection of companies” under the name Alphabet, which focus on a number of different businesses.

Source: Reuters