Samsung to Discuss Investor Plans Amid Calls to Split Company in Two
South Korean tech giant Samsung Electronics will discuss plans to boost shareholder value on Tuesday, following increased pressure by a U.S.-based hedge fund and a new report alleging the company may consider dividing itself in two.
Market analysts have long speculated that a split would help Samsung family heirs increase their control of the company. On Monday, the Seoul Economic Daily reported that the South Korean conglomerate will discuss its plans -- including the one about splitting -- on a conference call on Tuesday morning.
Activist fund Elliott Management floated the idea of fracturing the company in October, and also called on the firm to pay out $26 billion to shareholders in a special dividend. Elliott owns a 0.6 percent stake in Samsung.
Samsung’s call to investors comes during a tumultuous time for the company, which is still reeling from the recall and eventual scrapping of its new Galaxy Note 7 smartphone. The withdrawal, due to the gadget’s tendency to overheat or catch fire, will cost the company $5.2 billion over three quarters. The company also ordered a recall 2.8 million washing machines in November.
Samsung has not confirmed whether it is considering the split.