SEOUL (Reuters) – Shares in Cheil Industries Inc, the de facto holding company of Samsung Group, doubled on its debut on Thursday in the latest in a series of steps toward generational succession for South Korea’s largest conglomerate.
Cheil is about 42 per cent owned by Samsung Electronics Co Ltd Chairman Lee Kun-hee and his three children, and is expected to be the main vehicle through which the family will keep control of the group.
With affiliate Samsung Card having sold its entire stake in Cheil during the offering, a link in one of Samsung’s circular cross-holding structures has been broken which will make it easier to divvy up the empire between the nheirs, analysts said.
“There are a lot of scenarios about the final picture, but the owner family’s stakes in Cheil are one of the few cards they can play to strengthen control in units such as Samsung Electronics. Cheil’s value is expected to increase going forward,” said Kim Joon-sop, analyst at E-Trade Korea Co, a securities brokerage.
The May heart attack and hospitalisation of Lee Kun-hee is seen having added urgency to the process of transferring control to the next generation, with Samsung Electronics vice chairman Jay Y Lee seen as his most likely successor as leader of the family business.
The debut gave a combined value of about 5.5 trillion won ($4.99 billion) for the stakes held by the three heirs – Jay Y Lee and sisters Lee Boo-jin and Lee Seo-hyun.
Analysts have speculated that the children could sell some of their shares after the IPO to help pay for an inheritance tax bill estimated to be as high as $6 billion.
Besides the November listing of IT services affiliate Samsung SDS Co Ltd, which unlocked about $5 billion for the heirs, Samsung Group also sold its stakes in four defence and chemical affiliates to Hanwha Group.