Samsung Group’s insurance arms, Samsung Life Insurance and Samsung Fire & Marine Insurance, are divesting a combined 1.5 trillion won (approximately $1 billion) worth of Samsung Electronics stock. This strategic move follows Samsung Electronics’ recent treasury share cancellation, which inadvertently increased the insurers’ ownership stakes.
Samsung Life Insurance announced on Thursday its plans to sell 6,244,658 Samsung Electronics shares, valued at around 1.3 trillion won. Concurrently, Samsung Fire & Marine Insurance disclosed its intention to sell 1,091,273 shares, amounting to 227.5 billion won.
In total, the planned divestment represents approximately 0.12 percent of Samsung Electronics’ outstanding shares. The shares are slated to be sold via a block trade during Friday’s trading session.
This action is a direct consequence of Samsung Electronics’ decision to cancel approximately 73.36 million treasury shares in the first half of the year, a move undertaken as part of its shareholder return policy. This cancellation reduced the overall number of outstanding shares, consequently boosting the ownership percentages of existing shareholders, including the two insurance companies. This increase raised concerns that the insurers could potentially exceed regulatory limits on ownership in non-financial entities.
The Act on the Structural Improvement of the Financial Industry stipulates that a financial company’s ownership in a non-financial company cannot exceed 10 percent.
“We have decided to sell a portion of the stake that is projected to surpass the regulatory threshold to proactively mitigate any potential legal violations,” Samsung Life stated in a regulatory filing.
Following the share sale, Samsung Life’s stake in Samsung Electronics will decrease from 8.51 percent to 8.41 percent, while Samsung Fire’s ownership will decline from 1.49 percent to 1.47 percent.
jwc
