SEOUL, KOREA - Samsung Group’s attempt to merge Samsung Heavy Industries with Samsung Engineering ended in a failure due to higher-than-expected share buyback costs.
Stock analysts predicted that the cancellation of the merger between Samsung Heavy Industries and Samsung Engineering would produce a negative short-term impact on their respective share prices.
As of 10:45 am of November 19, the share prices of Samsung Heavy Industries and Samsung Engineering fell by 6 percent and 4 percent, respectively, compared to a day ago.Shareholders who were opposed to the companies’ merger attempt had the right to ask them to buy back their shares.
A group of institutional investors, including the National Pension Service, whichwere concerned about uncertain market conditions and sluggish stock prices of the two companies, played a key role in nullifying the merger attempt. At present, the pension firm has a 5.91-percent stake in Samsung Heavy Industries and a 6.59-percent stake in Samsung Engineering.
Article provided by The Korea Economic Daily
