Samsung Mulls Splitting Into Two Companies

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Samsung may be a South Korean company, but it’s also a household name around the world. However, the image of the company was badly battered after reports that its flagship smartphone model, Note 7, was catching fire due battery issues. Samsung was forced to stop the production of the phone altogether in October. They also suffered another setback when they issued recalls on some of their washing machines after customers complained of technical problems which in some cases resulted in the machines exploding.

Since then Samsung has been under pressure from some investors to break the company into a holding unit and an operations company. They believe that such a much would boost their share value. In a statement the company said it would seek “external advisers to conduct a thorough review of the optimal corporate structure.”

Meanwhile the firm has announced plans to increase dividend as it plans to continue to buy back more shares. It also plans to raise the dividend of 2016 by 36% compared to last year.

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Elliot Management, a United States based hedge fund has argued that a split would simplify Samsung’s structure and make it easier to ascertain a precise valuation of the firm’s worth.

The electronics giant is still mulling the possibility of splitting the firm. But that didn’t stop them from announcing plans to nominate at least “one new, international, independent board member” to improve governance.

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