Samsung Sells Off Chemicals and Defense Assets

02.12.2014 -

South Korea's Samsung Group has announced it will sell stakes in four chemical and defense firms for 1.9 trillion won ($1.72 billion) to compatriot Hanwha Group.

Media reports said this is the latest move in the massive task of reorganizing the business conglomerate to facilitate its division among the children of Samsung Electronics chairman Lee Kun-hee, 72, who has been hospitalized since a May heart attack. In the event of his death, they could face huge sums in inheritance fees.

Prior moves have included stake transfers between Samsung units intended to narrow the sprawling group's focus.

The listing of Samsung SDS and the upcoming initial public offering of Cheil Industries are expected to provide greater financial flexibility to manage that process.

Samsung will also sell a 57.6% stake in Samsung General Chemicals Co to Hanwha Chemical and Hanwha Energy for 1.06 trillion won. The businesses include Samsung's portion of Samsung Thales Co, a joint venture with Thales, and Samsung Total Petrochemicals Co, a 50:50 joint venture with France's Total, which produces ethylene, propylene and derivatives.

The chemicals arm also produces PTA, the feedstock for PET polymer.

Samsung Electronics has told Korean regulatory authorities it would use the 761 billion won raised from the deals to invest in new businesses.