South Korean Court Ends Elliott’s Effort To Stop Samsung Merger

South Korean Court Ends Elliott’s Effort To Stop Samsung Merger

A court in South Korea ruled against an effort by American activist investor Paul Singer’s Elliott Associates to block an upcoming shareholders’ vote on a proposed merger between two Samsung subsidiaries.

According to analysts, the merger is a key piece in the succession plan of the family that controls Samsung. The electronics and manufacturing giant is South Korea’s leading family-controlled conglomerate, and is controlled via a complicated web of shareholdings among the firm’s subsidiaries. The merger of these two main subsidiaries will create a holding company more in line with global standards and will make it easier for the family to maintain control.

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More on planned Samsung merger

Singer and Elliott Associates were trying to stop the transfer of power move at Samsung by filing a request for an injunction with a Seoul District Court. Elliott was asking the court to stop the construction and engineering-focused Samsung C&T Corporation from holding a shareholders’ meeting on July 17th to vote on an $8 billion takeover bid from Samsung subsidiary Cheil Industries.

Elliott currently holds a 7.12% stake in Samsung C&T, is claiming the all-stock merger offer from Cheil “grossly undervalues” Samsung C&T. The legal filing from Elliott argued the merger would serve the family that controls the Samsung conglomerate, but was not in the best interests of all of the shareholders.

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