Samsung considers corporate split as pressure increase

The company has presented a roadmap of actions with the objective of enhancing the Samsung’s long-term, sustainable value creation for shareholders. “We are committed to enhancing sustainable long-term value for our shareholders and to remaining good stewards of capital,” said Dr. Oh-Hyun Kwon, Vice Chairman and CEO of Samsung Electronics in a statement. Within the scope of the roadmap, Samsung aims to enhance its shareholder returns policy, capital management and the operation of the Board of Directors while also ensuring that the Company can continue to direct the required investment resources to opportunities and to nurture future growth drivers. Over the years Samsung has taken steps to simplify its business to concentrate on core capabilities as it continues to review opportunities to optimise long-term value. “This includes the possibility of creating a holding company structure and the potential benefits and feasibility of listing the Company’s shares on additional international exchanges,” the company writes in the statement. Samsung has turned to external advisors to conduct a review of the optimal corporate structure. The company also expresses that; “the review does not indicate the management or the Board’s intention one way or another. The process is expected to require at least 6 months and Samsung Electronics will make a decision only after the review is complete.” The tech giant also announced measures to enhance its shareholder return program. For 2016 and 2017, the Company will allocate 50% of free cash flow to shareholder returns. Samsung says it increase total dividends in 2016 by 30% compared with 2015, bringing the annual dividend amount to KRW 4 trillion (EUR 3.2 billion). Taking into account the recent share buybacks and cancellations, this will result in a 36 % rise in 2016 dividends per share.