Publications
Publications
- October 2016 (Revised April 2017)
- HBS Case Collection
Succession Planning at Samsung: The Merger Formula of Cheil Industries and Samsung C&T
By: Gwen Yu and Tim Gray
Abstract
A merger deal of two Samsung group companies becomes a center of a corruption scandal. The merger of Cheil Industries and Samsung C&T was seen as a crucial step to transfer power to Lee Jae Yong, the heir of Samsung group. The deal was criticized to purposefully undervalue Samsung C&T’s stocks to transfer wealth to Lee at the expense of the shareholders. Elliott Management, a New York–based hedge fund, launches a campaign urging shareholders to vote against the merger. However, the National Pension Service (NPS)—a major shareholder of Samsung C&T—votes in favor of the deal. The case sheds light on the political ties between the government and the family controlled conglomerates in South Korea, which have powered the country’s economy for decades.
Keywords
Citation
Yu, Gwen, and Tim Gray. "Succession Planning at Samsung: The Merger Formula of Cheil Industries and Samsung C&T." Harvard Business School Case 117-036, October 2016. (Revised April 2017.)