Samsung Electronics has confirmed it is considering dividing the company into two separate firms.
The business continues to be under pressure to break itself into a an operating organization and a holding unit to improve shareholder value.
The South Korean technology giant said it could continue to buy back more shares and also announced plans to raise dividends.
Restructuring pressure was building following the Note 7 fiasco.
In October, after failing to solve battery issues ultimately causing overheating as well as the apparatus catching fire, the firm was made to cease generation of its own main smartphone version.
Samsung said it could bring in “external advisers to conduct a thorough review of the optimal corporate structure.”
The firm pointed out that “the review does not indicate the management or the board’s intention one way or another.”
Why two firms?
The fund claimed that the split would simplify the organization construction which makes it more easy to get a clear valuation of the assets of the business.
Now, businesses within the broader Samsung Group are linked via a complex web of cross shareholding, linking Samsung Electronics to affiliates including transportation, to insurance company to heavy businesses and a lot of other Samsung’s businesses.
That makes it hard for investors to get a definite notion of what each person Samsung business is truly worth.
Of dividing Samsung Electronics into two firms, the power will be that just the holding company would change while the managing unit may be evaluated individually – making it a lot more easy to arrive in a business assessment that is clean.
The suggestion has gained support from several of the investors of Samsung also additionally it is believed that it’d give more management back to the founding Lee family supporting the firm.
