SEPTEMBER 1, 2014 — Korean shipbuilding giant Samsung Heavy Industries has officially announced that it will merge with Samsung Engineering Co., Ltd, the first and largest engineering company in Korea.
Samsung Heavy will absorb Samsung Engineering by issuing 236 new shares for every 100 Samsung Engineering shares. Samsung Heavy will issue 94 million new shares, valuing the deal at 2.5 trillion won, or $2.4 billion.
The two companies plan to hold a special shareholders meeting on October 27, 2014 and complete the merger process on December 1, 2014.
A company announcement says that "through the merger, Samsung Heavy Industries will gain engineering, procurement, and project management capabilities, which are the strengths of Samsung Engineering, and establish a stable foundation for the growth of its offshore plant business."
"The two companies will be reborn as the world's most competitive plant company based on our world-class manufacturing facilities, fabrication experience, and outstanding technical manpower in the onshore and offshore businesses," said Dae-young Park, President and CEO of Samsung Heavy Industries.
Analysts see the merger as part of wider succession moves at work within the giant Samsung Group, which is dominated by crown jewel Samsung Electronics, whose Chairman, Lee Kun Hee, has been hospitalized since suffering a heart attack in May