Samsung considers splitting business in two

By:
James Pearce
Published on:

World's biggest smartphone-maker could divide business as it looks to maximise shareholder returns

The world’s biggest smartphone manufacturer Samsung Electronics is considering splitting its business into two companies, according to reports.

Last month, US-based hedge fund Elliott Management proposed separating Samsung in to a holding company and an operating arm. Elliott holds a 0.6% stake in the Korean giant.

According to reports from the Seoul Economic Daily, Samsung is considering the proposal and is set to make an announcement about its plans tomorrow (29 November 2016) following a board meeting.

Under the proposal, Samsung would pay out a $26 billion dividend to shareholders. But the move would help improve shareholder value as well as create a more simplified management structure, the hedge fund claimed.

It comes just months after Samsung was hit by a PR disaster after reports of Galaxy Note 7 smartphones led the manufacturer to recall the devices. The recall is estimated to have cost Samsung more than $5 billion.