SEOUL (Reuters) - Tech giant Samsung Electronics Co Ltd (005930.KS) said on Wednesday it has no plans to merge with affiliate Samsung SDS Co Ltd (018260.KS), in an attempt to quell speculation that such a deal is in the works to help Samsung Group’s succession process.
“The management wants me to express clearly that we do not have a plan to merge with SDS,” Robert Yi, Samsung Electronics’ head of investor relations, said at a company event in Seoul.
Samsung Group [SAGR.UL] has been restructuring its sprawling business empire over the past year to secure a stable transfer of control from the founding family patriarch Lee Kun-hee to his three children. The elder Lee remains hospitalized following a May 2014 heart attack, adding urgency to these efforts.
Some investors and analysts have said Samsung Electronics and Samsung SDS, an IT services company, could merge soon. Such a deal would give Samsung Group heir apparent Jay Y. Lee and his sisters, major shareholders in SDS, shares in Samsung Electronics, the crown jewel of South Korea’s top conglomerate.
“This announcement may not remove all the rumors and hearsayers in the market but I hope it conveys the management’s thoughts on this issue,” Yi said.
Samsung’s de facto holding firm, Cheil Industries Inc (028260.KS), and Samsung C&T Corp 000830.KS announced in late-May an all-stock merger, putting stakes in key manufacturing and financial arms in a single vehicle under the Lee heirs’ control.
Investors expect more group consolidation moves to be announced in the near term, though Samsung Group has not disclosed its restructuring plans.
Reporting by Se Young Lee; Editing by Muralikumar Anantharaman