Is Samsung splitting in half as investor pressure builds up? The Korean tech giant has gone through a lot since reports of the exploding Galaxy Note 7 made it very controversial and this has greatly affected how the company is received by the public.
Reports say that because of the unusual pressure from shareholders, the tech giant is considering desperate measures to prove investor returns. It has been said that it will consider creating a holding company and if done, would be the biggest shuffle ever in the company's history.
The proposed move came after US hedge fund Elliott Management called for Samsung in October to split itself into two parts. One would be a holding vehicle while the other would be an operating company and of course, they are still owned by the same owner.
Reuters reports that Samsung, who is currently the world leader in smartphones, chipsets, televisions and many other appliances said that it was absolutely neutral about whether or not they should proceed with the split. They also provided very little details about what their plans are to protect their investors and what steps they are going to take to restructure their corporation.
While a split is not yet confirmed, Samsung had officially revealed that they are up to something. Forbes reports that Samsung has confirmed that it will be seeking the help of external advisors to conduct a thorough review of the corporate structure that would best work for it.
They also add however, that the review will not reflect what the South Korean tech giant or its board will actually do. In a lengthy official statement, Samsung gives out details on how it was already planning to give more cash to the shareholders, and that it would increase total dividends in 2016 by 30 percent.
This would bring up the annual dividend amount to $3.4 billion dollars and it is also said that it will pay out half of its free cash flow to shareholders in 2016 and 2017. This official statement, while it would work, points out to the possibility that Samsung might not follow at all Elliott Managements advise even if it had been pestering Samsung for several years already.
