Samsung's thinking of splitting in two and pledges to boost 2016 dividend to reassure investors

 
Rebecca Smith
Samsung says it has undertaken a review into the
Samsung says it has undertaken a review into the "very complex" issue of the split (Source: Getty)

Samsung Electronics has confirmed it's weighing up dividing the firm into two separate companies.

It has been under pressure from some investors to break itself into a holding unit and an operating company to bolster shareholder value and said it will be outlining plans to investors in Seoul today to boost just that.

Samsung said it had undertaken a review into the "very complex" issue to assess "what is the right corporate structure" in a process that's expected to take at least six months. A decision will be taken once that's complete.

Read more: Samsung splashes $8bn on connected cars company

It did add though that the review "does not indicate the management or the board's intention one way or another".

The company has also pledged to boost its 2016 dividend by 30 per cent compared to last year, bringing the annual dividend to four trillion won; a 36 per cent rise in 2016 dividends per share, to 28,500 won.

It comes soon after Elliott Management, the American activist investor, called for the firm to be split in two and provide more in shareholder pay-outs. It owns 0.6 per cent of the electronics giant.

"We are committed to enhancing sustainable long-term value for our shareholders and to remaining good stewards of capital," said Dr Oh-Hyun Kwon, vice chairman and chief executive of Samsung Electronics.

Read more: Samsung earnings hit eight year low after Galaxy Note 7 debacle

The South Korean firm is still dealing with the aftermath of its Galaxy Note 7 phone recall, which is expected to cost it around $6bn. The company cut profit forecasts by a third in the wake of the incident.

Then in November, it was announced the company had to recall nearly three million washing machines following reports of injuries.

Related articles