Samsung Electronics announced on Tuesday it is considering splitting itself into a holding company and an operating company in order to boost shareholder value, in what could be the biggest shake-up in the South Korean tech giant's history.

According to Reuters, the move is part of a bid to improve investor returns after Samsung came under pressure from shareholders to simplify its business structure. Critics argue that the current structure makes it difficult to value Samsung since its assets are spread across various sister companies and affiliates. Establishing a separate holding firm would bring these under one name, improve transparency, and make it easier to value Samsung Electronics' business.

Samsung
Samsung said it would also increase returns to shareholders by one third and accelerate its share buy-back program. The plans come after U.S. hedge fund Elliot Management, which owns 0.6 percent of Samsung, called for a managed split of the company last month.

A split in two of the company has been a subject of speculation among market analysts for a while and would allow Samsung to list on additional stock exchanges around the world. However, some say any potential split could hand more control back to the original family owners and be a particularly favorable outcome for Samsung heir apparent Lee Jae-Yong, who was recently nominated for a seat on the company board.

Despite the announcement, Samsung offered little detail on the potential restructuring and said it was "absolutely neutral" about whether to proceed. "The review does not indicate the management or the board's intention one way or another," said the company in a statement, adding it had hired external advisers for a potentially six month-long review process.

While Samsung moves to assuage investor concerns, the company still has to win back confidence in its consumer mobile division after its disastrous Galaxy Note7 recall in early September. Samsung's share of the smartphone market dropped in the third quarter of 2016 to its lowest level in nearly two years, with financial results for the fourth quarter expected to suffer more after the subsequent discontinuation of the flagship phone.

Tag: Samsung

Top Rated Comments

aussiephil Avatar
66 months ago
They should stop copying and attempt to be an actual reputable company.
Score: 6 Votes (Like | Disagree)
djcerla Avatar
66 months ago
More aptly, "Mixed Legal Businesses" and "Bribes, Corruption and Other Bets".
Score: 3 Votes (Like | Disagree)
D.T. Avatar
66 months ago
Maybe they should split into two business units: products that do explode and products that don't explode.
Score: 3 Votes (Like | Disagree)
HobeSoundDarryl Avatar
66 months ago
I thought that's precisely the whole idea.
Right. Another day, other companies wanting to merge into one bigger company and the story is spun just slightly differently... that merging into a structure like Samsungs is about diversifying risk across many business units, lowering risk should any one business unit have trouble:

"Critics argue that the current structure (of separate business structures) makes it difficult to value <company buying the other company>, since their separate assets are spread across various sister companies & affiliates." Merging these 2 companies together can realize more favorable ROIs by streamlining business operations, eliminating redundancy and facilitating additional focus under one unified brand and leadership.

Basically IMO, some banker wants to earn a commission, so big corporate structure changes look like easy money. Hop forward 5 or 15 years and some other banker wanting to earn commission will be spinning merging the splits into one larger company to "streamline operations," etc. It's kind of money-making "busy work" for the 1%ers.
Score: 2 Votes (Like | Disagree)
SethBoy Avatar
66 months ago
Pre-split: Samsung

Post-split: Orange and Pear
Score: 2 Votes (Like | Disagree)
NightwalkerUK Avatar
66 months ago
Stop copying? Where have you been for the last few years. The s7 and s7 edge what is that copied from?

Seems to me that maybe Apple should not copy but they are next year with the same type of curved display.
Agree 100%, Apple haven't had an innovative idea for ages now, their iOS has slowly 'borrowed' ideas from Android (for the better) while the phones have stagnated for the past three generations now.

As stated above, the Mac line is just bobbing along on the surface both design wise and innovatively.

This coming from a die hard Apple fan too, they're long overdue a fresh injection of ideas.
Score: 2 Votes (Like | Disagree)

Popular Stories

airtag in hand

Apple AirTag Linked to Increasing Number of Car Thefts, Canadian Police Report

Friday December 3, 2021 7:10 am PST by
Apple's AirTags are being used in an increasing number of targeted car thefts in Canada, according to local police. Outlined in a news release from York Regional Police, investigators have identified a new method being used by thieves to track down and steal high-end vehicles that takes advantage of the AirTag's location tracking capabilities. While the method of stealing the cars is largely ...
telsa cyberwhistle

Elon Musk Urges Customers to Buy 'Tesla Cyberwhistle' Instead of Apple Polishing Cloth

Wednesday December 1, 2021 4:01 am PST by
Tesla CEO Elon Musk has encouraged customers to buy the "Cyberwhistle" for $50 instead of Apple's much-discussed Polishing Cloth. The product page, which Musk shared on Twitter on Tuesday evening, offers a limited edition stainless steel whistle with the same distinctive design of the Tesla Cybertruck:Inspired by Cybertruck, the limited-edition Cyberwhistle is a premium collectible made from ...
maxresdefault

Five Features to Look Forward to in the 2022 MacBook Air

Tuesday November 30, 2021 1:51 pm PST by
In 2022, Apple is going to release an updated version of the MacBook Air with some of the biggest design changes that we've seen since 2010, when Apple introduced the 11 and 13-inch size options. In the video below, we highlight five features that you need to know about the new machine. Subscribe to the MacRumors YouTube channel for more videos. No More Wedge Design - Current MacBook...
apple top apps games 2020

Apple Reveals the Most Downloaded iOS Apps and Games of 2021

Thursday December 2, 2021 12:05 am PST by
Along with naming its editorial picks for the top apps and games of 2021, Apple today shared charts for the most downloaded free and paid apps and games in the United States across 2021. The number one most downloaded free iPhone app was TikTok, followed by YouTube, Instagram, Snapchat, and Facebook. The top paid iPhone apps included Procreate Pocket, HotSchedules, The Wonder Weeks, and Touch...
iPhone SE Cosmopolitan Clean

New iPhone SE Reportedly on Track for Release in First Quarter of 2022

Tuesday November 30, 2021 8:08 am PST by
Apple plans to release a third-generation iPhone SE in the first quarter of 2022, according to Taiwanese research firm TrendForce. If this timeframe proves to be accurate, we can expect the device to be released by the end of March. As previously rumored, TrendForce said the new iPhone SE will remain a mid-range smartphone with added support for 5G:In terms of product development, Apple is...
m3 feature black

Macs With 'M3' Chips Expected to Use TSMC's 3nm Chip Technology With Test Production Reportedly Underway

Thursday December 2, 2021 7:36 am PST by
Apple's chipmaking partner TSMC has kicked off pilot production of chips built on its 3nm process, known as N3, according to Taiwanese supply chain publication DigiTimes. The report, citing unnamed industry sources, claims that TSMC will move the process to volume production by the fourth quarter of 2022 and start shipping 3nm chips to customers like Apple and Intel in the first quarter of...
apple view concept right corner

Apple Planning to Replace the iPhone With AR Headset in 10 Years

Wednesday December 1, 2021 2:29 am PST by
Apple is planning to replace the iPhone with an augmented reality (AR) headset in 10 years, a process that is apparently due to start as soon as next year with the launch of a head-mounted device, according to a recent report. Concept render of Apple's rumored AR headset by Antonio De Rosa In a note to investors seen by MacRumors, eminent analyst Ming-Chi Kuo explained that "Apple's goal is...