Samsung Group (Seoul) said on Wednesday that it will sell four chemical and defense subsidiaries to Hanwha Group (Seoul) in a deal worth 1.9 trillion South Korean won ($1.72 billion). Samsung informed the Korea Stock Exchange that it will sell its defense affiliate Samsung Techwin and Samsung General Chemicals to Hanwha. The divestments will be completed by the first half of next year, Samsung says. Hanwha’s board approved the deal on Wednesday.
Samsung will sell a 57.6% stake in Samsung General Chemicals for won1.06 trillion, and a 32.4% stake in Samsung Techwin for won840 billion. Two other affiliates, Samsung Thales and Samsung Total Petrochemicals, are automatically included in the deal because they are owned 50% by the companies being sold to Hanwha. Hanwha will jointly control these two companies with France’s Thales Group and Total, which own the other half of the stakes.
Hanwha will have the controlling share of 81% in Samsung General Chemicals after taking over the stakes held in the firm by Samsung Techwin. The two defense arms will be taken over by Hanwha Corp., the holding company of the group, and the chemical affiliates will be bought by Hanwha Chemical and Hanwha Energy Corp., Samsung says.
Samsung Electronics, Samsung C&T, and Samsung Securities currently hold shares in Samsung Techwin, while Samsung General Chemicals is owned by Samsung C&T, Samsung SDI Co. and Samsung Electro-Mechanics Co. Samsung C&T, meanwhile, will maintain its 18.5% stake in the chemical unit for business between Hanwha and Samsung, the companies say. Hanwha Chemical said separately it hopes to diversify its product lineup and expand its competitiveness in the petrochemical sector through the deal.
Samsung General Chemicals had transferred most of its business to Samsung Total and acted as a holding firm of the group’s chemical affiliates.
Samsung Techwin produces engines for FA-50 light attackers, as well as Korea Utility Helicopter (KUH). Samsung Thales is a mass producer of military goods, such as thermal imagery devices. Samsung Techwin also owns a 10% stake in Korea Aerospace Industries, South Korea’s sole aircraft manufacturer and total system integrator.
Samsung has been speeding up its reorganization following hospitalization of head Lee Kun-hee in May after his heart attack. His absence made it urgent to review the group’s strategy ahead of a managerial transfer to his children and focusing on mainstay business for the future.
By Natasha Alperowicz