Samsung Heavy Denies Merger Plan
South Korean shipbuilder Samsung Heavy Industries denied on Tuesday a South Korean media report that it will try again to merge with sister company Samsung Engineering later this year.
The DongA Ilbo, citing an unnamed Samsung Group official, reported that the two firms will launch another merger attempt in May or June as part of Samsung Group's efforts to simplify its shareholding structure in preparation for the succession of control from the ailing patriarch Lee Kun-hee to his children.
Samsung Heavy's planned $2.5 billion takeover of Samsung Engineering collapsed in November due to shareholder opposition. Some investors were dubious about the benefits of combining a shipbuilder with an engineering and construction firm.
Samsung Engineering, which builds petrochemical and energy facilities, reported a 1.03 trillion won operating loss in 2013 as it booked provisions for loss-making projects in regions and areas where it has less experience, such as a chlor-alkali plant in the United States, as well as low-margin projects it won between 2009 and 2012.
Earlier this month, Samsung Heavy Industries signed and MoU with India’s Cochin Shipyard for a technology partnership in the construction of LNG Carriers. The company also received orders for six 21,100 TEU ultra-large container ships, worth around $0.95 billion, and four tankers worth around $0.23 billion.