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New Samsung C&T gets under sail after merger

The merged entity of two key Samsung Group units made its official launch in South Korea on Tuesday, after repelling a slew of legal challenges from a U.S. hedge fund that opposed the merger and garnering shareholder approval.

Samsung C&T Corp., the construction arm of the country's top conglomerate, won outright shareholder approval on July 17 to merge with Cheil Industries Inc., the apparel and resort unit, for 8.9 trillion won ($7.52 billion).

The company received the go-ahead after two months of an uphill battle with Elliott Associates, who sought to block the move, claiming that the terms of the merger undermined shareholder value.

The launch of the new Samsung C&T is considered by market watchers a significant step forward for the controlling Lee family since it will give a boost to the generational leadership transfer to Lee Jae-yong, the only son of the group's patriarch Lee Kun-hee.

The 47-year-old scion will be the largest shareholder in the new entity with a 16.5 percent stake, with his two sisters, Boo-jin and Seo-hyun, each holding 5.5 percent.

Samsung has been streamlining its structure through a slew of big shake-ups of group affiliates after senior Lee suffered a heart attack last May and has been bedridden since.

Among the deals is the sale of its key chemical and defense units to Hanwha Group, the No. 3 conglomerate in the country, for 2 trillion won in November last year.

The company aims to generate an annual 60 trillion won in revenue by 2020 through the synergy created from the two units whose businesses stretch out to clothing, food, leisure and biomedicine, the company said in a statement.   

Samsung C&T has also begun to push for a biomedicine business as a new growth driver that is targeting 1.8 trillion won in sales.

It is preparing to list its biosimilar-making subsidiary Bioepis Co. on the Nasdaq.

For the building sector, Samsung C&T plans to increase revenue to 23.6 trillion won in the next five years from 16.2 trillion won in 2014.

Its fashion segment will seek to further expand its overseas footing into the U.S. and Europe, it added.

It plans to hold its first board meeting Thursday, where it will elect the board director, it said.

The new Samsung C&T, with 12,500 employees, will be headed by four chief executives from the two units in charge of each division -- construction, trading, fashion and resort -- for the time being, the company said.   

The new entity whose market capitalization is currently estimated at some 27 trillion won, the fifth-largest, will be re-listed on the main Seoul bourse on Sept. 15. (Yonhap)