Samsung Engineering Corporation is trying to merge again with Samsung Heavy Industries Corporation to be able to increase its share prices. Samsung Heavy went up to 11.3% while Samsung Engineering went up to 17.5%. As such, the plan of merging can create collaboration between the two companies to be able to save its assets and liabilities.
According to Baron's Asia, Samsung Heavy lost $1.3 billion in its operation during June quarter and its year-to-date dropped to 39.7%. The report said that this is worst from what is expected by the company. On the other hand, Samsung Engineering jumped to 17.5% in Seoul on September 16, which is the largest one-day gain since 1988.
More so, an analyst of Hana Daetoo Securities Corporation in Seoul, Park Moo Hyun, said in Bloomberg that the merger can increase share prices of the two companies. He also mentioned that the merger can happen early next year. Samsung Heavy's Chief Executive Officer, Park Dae Young, said in Bloomberg that the merger with Samsung Engineering can create collaboration. He added though that the merger may take time to happen.
On the other hand, related report noted that Samsung Group has planned the merger of Samsung Heavy and Samsung Engineering in November 2014. It is believed that these two units of the holding company, Samsung Group, decided not to complete the merger in 2014. Back then, this strategy was to compete with Technip SA and Saipem SpA in offshore oil and gas market. As such, bigger orders were likely to occur such as building large LNG ships and development of energy projects. Nevertheless, the reason the merger was not accomplished was the failure to win over shareholders' support.
Samsung Group does not have any announcement regarding the progress of the merging process and when will it happen. If Samsung Heavy and Samsung Engineering's collaboration will proceed, it will be a huge increase in its market value.
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