Seoul, July 17: South Korea's dominant Samsung conglomerate - run by the country's wealthiest family secured shareholder approval today for the merger of two affiliates, seeing off a formidable challenge from investor activists led by a combative US hedge fund.
The victory, following a bitterly contested proxy battle, will come as an enormous relief to the founding Lee family as it seeks to restructure the multi-headed Samsung Group ahead of a generational transfer of power from ailing patriarch Lee Kun-Hee.
At an emergency meeting on Friday, shareholders of construction firm Samsung C&T voted in favour of a takeover by the group's de facto holding company, Cheil Industries, in an all-stock deal.
The merger had been passionately opposed by a significant number of C&T investors, rallied by US hedge fund Elliott Associates - the company's second-largest single shareholder.
Elliott had argued that the takeover wilfully undervalued the C&T share price at an unacceptable cost to its shareholders.
Samsung C&T executives insisted the deal would enhance shareholder value in the long-run, creating a more competitive merged company that could target sales of 60 trillion won (USD 52 billion) by 2020.