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| Version 3 | Version 4 |
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| Samsung Electronics considers splitting firm in two | Samsung Electronics considers splitting firm in two |
| (1 day later) | |
| Samsung Electronics has confirmed it is considering dividing the company into two separate firms. | Samsung Electronics has confirmed it is considering dividing the company into two separate firms. |
| The company has been under pressure from some investors to break itself into a holding unit and an operating company to boost shareholder value. | The company has been under pressure from some investors to break itself into a holding unit and an operating company to boost shareholder value. |
| The South Korean technology giant also announced plans to increase dividends and said it would continue to buy back more shares. | The South Korean technology giant also announced plans to increase dividends and said it would continue to buy back more shares. |
| Restructuring pressure had mounted after the Galaxy Note 7 fiasco. | |
| In October, the company was forced to stop production of its flagship smartphone model after failing to resolve battery problems leading to overheating and the devices catching fire. | In October, the company was forced to stop production of its flagship smartphone model after failing to resolve battery problems leading to overheating and the devices catching fire. |
| A 'thorough review' | A 'thorough review' |
| Samsung said it would bring in "external advisers to conduct a thorough review of the optimal corporate structure." | Samsung said it would 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." | The firm pointed out that "the review does not indicate the management or the board's intention one way or another." |
| Samsung also said it would pay out half of its free cash flow to shareholders for 2016 and 2017 and raise the dividend for 2016 by 36% compared to the previous year. | Samsung also said it would pay out half of its free cash flow to shareholders for 2016 and 2017 and raise the dividend for 2016 by 36% compared to the previous year. |
| In order to improve governance, the firm said it would nominate at least "one new, international, independent board member" as well as create a separate governance committee. | In order to improve governance, the firm said it would nominate at least "one new, international, independent board member" as well as create a separate governance committee. |
| The company's statement comes after US activist hedge fund Elliott Management called for the firm to split into a holding unit for ownership purposes and a separate operating company. | The company's statement comes after US activist hedge fund Elliott Management called for the firm to split into a holding unit for ownership purposes and a separate operating company. |
| Why two companies? | Why two companies? |
| The fund argued that a split would simplify the company structure making it easier to get a clear valuation of the firm's assets. | The fund argued that a split would simplify the company structure making it easier to get a clear valuation of the firm's assets. |
| Currently, companies within the wider Samsung Group are linked through a complicated web of cross shareholding, linking Samsung Electronics to many other Samsung's firms and affiliates ranging from shipping, to heavy industries to insurance business. | Currently, companies within the wider Samsung Group are linked through a complicated web of cross shareholding, linking Samsung Electronics to many other Samsung's firms and affiliates ranging from shipping, to heavy industries to insurance business. |
| That makes it difficult for investors to get a clear idea of what each individual Samsung company is actually worth. | That makes it difficult for investors to get a clear idea of what each individual Samsung company is actually worth. |
| The benefit of splitting Samsung Electronics into two companies would be that the cross-shareholding would affect only the holding company while the operating unit could be assessed separately - making it a lot easier to arrive at a clean company evaluation. | The benefit of splitting Samsung Electronics into two companies would be that the cross-shareholding would affect only the holding company while the operating unit could be assessed separately - making it a lot easier to arrive at a clean company evaluation. |
| The proposal has won support from several of Samsung's investors and it is also thought that it would give back more control to the founding Lee family behind the company. | The proposal has won support from several of Samsung's investors and it is also thought that it would give back more control to the founding Lee family behind the company. |