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Strategies & Market Trends : Speculating in Takeover Targets
ULBI 9.980-1.2%3:59 PM EDT

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To: richardred who wrote (3662)3/31/2014 8:57:37 AM
From: richardred   of 7058
Samsung SDI to merge Cheil Industries

SEOUL, March 31 (Yonhap) -- Samsung SDI Co., the world's top maker of TV displays and smartphone batteries, said Monday it will merge with Cheil Industries Co., another Samsung affiliate that produces electronic and chemical materials, a move seen as part of generational ownership transfer within Samsung Group and efforts to bolster corporate restructuring.

The merged entity will be launched on July 1, the company said in a regulatory filing, adding that shareholders of Cheil will get 0.44 SDI share for every Cheil share they own.

The deal is slated to be approved at the shareholders' meeting on May 30, the company said. Samsung SDI plans to keep its corporate name after the merger.

The merger is designed to help sharpen its competitive edge in the battery business by using Cheil's technologies in chemical and electronic materials, Samsung SDI said.

In mid-January, Samsung SDI signed a preliminary deal with Anqing Ring New Group and Shanxi Province in northern China to open a joint venture by April. They plan to start the construction and operation of an electric-vehicle battery plant next year and together invest a combined US$600 million over the next five years. The company has been expanding its global presence by supplying batteries to BMW AG's i3 electric car and Chrysler's F500e models.

The acquisition also aims to secure a new growth engine in the materials, parts and system sectors, it added.

Samsung SDI's market capitalization is estimated to increase to 10 trillion won ($9.37 billion) through the acquisition, with 14,000 employees and a net asset of 15 trillion won, industry watchers said. The merged company will seek to boost its annual sales to 29 trillion won by 2020, it added.

Samsung SDI posted 5 trillion won in sales last year, with Cheil recording 4.4 trillion won.

Market watchers said the merger will help facilitate Samsung Group's recent restructuring by dividing the group's business line to the third generation of the founding family, ahead of its anticipated transfer of ownership to them.

Lee Kun-hee, 72, chairman of the group's flagship company Samsung Electronics Co., has promoted his son and two daughters to the top positions of the group's affiliates in recent years.

Last December, Lee Seo-hyun, the chairman's second daughter and vice president of Cheil, was named president of fashion business at Samsung Everland Inc., the group's de facto holding firm.

Samsung Everland's business portfolio is composed of three divisions: construction, leisure and fashion.

Lee Jay-yong, the only son of chairman Lee and vice chairman of Samsung Electronics, is leading the group's key electronics business and owns a 25.1 percent stake in Samsung Everland, the operator of the country's largest amusement park of the same name.

His younger sister Lee Boo-jin, president of Hotel Shilla Co., a South Korean luxury hotel and resort operator, is focusing on hotel and duty free business, holding an 8.37 percent stake in the hotel.

Samsung SDI was set up in 1970 as a maker of Braun tubes for black-and-white TVs and added the rechargeable battery business into its portfolio in 2002.

Cheil, established in 1954, started its business as a textile maker and expanded its business line to chemicals in the 1990s and electronic materials in 2000s.

Last September, Cheil spun off its fashion division and sold it to Samsung Everland in a bid to concentrate on its materials business.
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