Samsung Group has agreed to sell stakes in chemical and defense subsidiaries and joint ventures to rival Korean conglomerate Hanwah Corp. for W1.9 trillion ($1.72 billion), pushing ahead with a stuttering restructuring as its controlling family prepares for a generational succession.
Seoul-based Hanwah, acting through its own subsidiaries, will pay W840 million for Samsung's 32.4% stake in surveillance equipment and weapons maker Samsung Techwin., and W1.06 trillion for a 57.6% stake in Samsung General Chemicals, according to filings by Samsung.
The sales were made to "secure capital resources for investments in new businesses and to strengthen the company's core competencies," Samsung said in a statement.
The deals will leave Hanwah with control of 81% of Samsung General Chemicals, including shares in the group owned by Samsung Techwin. Hanwah will also take over Samsungs stake in Samsung Thales Co. Ltd., a 14-year old joint venture with French arms maker Thales SA, and Samsung Total Petrochemicals Co. Ltd., a 50/50 petrochemical joint venture with French oil company Total SA.
Hanwah said that the acquisitions will make it Korea's largest weapons manufacturer, boosting its sales to W2.6 trillion from W1 trillion, and the nation's largest petrochemical business, with sales of about W18 trillion.
The assets are being sold by five Samsung affiliates, lead by the group's mobile phone maker Samsung Electronics Co. That unit, also on Wednesday, announced plans to buy back shares valued at W2.2 trillion, equal to 1.1% of its issued capital. It also announced plans to acquire 11.5 million treasury shares in another Samsung subsidiary, Chiel Worldwide Inc., for W220.8 billion.