Kris Carlon / Android Authority
While you hear the phrase Samsung, your thoughts in all probability jumps to smartphones and residential home equipment. However most don’t know that the corporate’s affect extends far past digital units. In its dwelling nation of South Korea, the Samsung Group operates every little thing from accommodations to hospitals and even runs the nation’s largest life insurance coverage agency. With so many companies and subsidiaries, you could be questioning — how does the Samsung Group handle day-to-day operations and who owns all of it?
Associated: The best Samsung phones on the market
Who owns Samsung?
Samsung is a big family-owned firm, which is usually known as a chaebol in South Korea. Different examples of chaebols embrace Hyundai and LG. As we speak, Samsung is led by Lee Jae-yong, a direct descendant of the corporate’s founder. With an estimated web value of $9.2 billion, he’s the second richest individual in South Korea.
Samsung is a South Korean firm owned by the Lee household.
Lee Jae-yong (often known as Jay Y. Lee) stepped up as Samsung’s govt chairman in October 2022. Previous to that, his father Lee Kun-hee headed Samsung for over three many years and formed the corporate into the electronics big we all know at present.
The idea of chaebols first emerged within the Nineteen Sixties after the Korean Conflict because the nation’s authorities entrusted choose corporations with constructing export manufacturing. This gave rise to a sort of symbiotic relationship between chaebols and the South Korean authorities that exists to at the present time. The affect of chaebols within the nation has led to some controversy, however extra on that later.
The South Korean authorities has assisted Samsung because the Nineteen Sixties in a bid to spice up the nation’s export output.
Samsung has been round since earlier than the primary laptop even existed. Lee Byung-Chull based Samsung in 1938, specializing in buying and selling dried fish, noodles, and different home produce. Within the many years since, the corporate has diversified into insurance coverage, client finance, electronics, hospitality, building, and quite a lot of different industries by means of a sequence of acquisitions and investments.
As we speak, the Samsung Group accounts for 20% of South Korea’s Gross Home Product (GDP). That’s one of many largest single contributions by any firm on this planet.
Is Samsung a publicly traded firm?
In whole, the Samsung Group controls round 80 subsidiaries. That is largely a results of the Lee household arising with artistic methods to retain as a lot management over the corporate as potential. You see, solely 19 of Samsung’s subsidiaries are publicly traded on the Korean inventory market. The Lee household owns sufficient shares in every subsidiary, each instantly and not directly, to steer the complete firm.
For instance, Samsung Electronics is partially owned by two different subsidiaries: Samsung Life Insurance coverage and Samsung C&T. On paper, Samsung’s chairman Lee Jae-yong has a a lot smaller particular person stake than both of these subsidiaries. Nonetheless, Lee additionally holds a big stake within the subsidiaries, so his management over Samsung Electronics not directly will increase. This sort of cross-ownership is widespread throughout South Korean chaebols.
Samsung’s subsidiaries personal elements of one another, which helps preserve the Lee household in management.
Moreover the Lee household, the South Korean Nationwide Pension Service additionally holds a large 8.6% stake in Samsung Electronics. And given the shut relationship between chaebols and the federal government, it ought to come as no shock that the Lee household normally faces little to no opposition to shareholder proposals.
Giant institutional traders, each Korean and worldwide, additionally maintain sizable stakes in Samsung and its subsidiaries. New York-based fund administration firm BlackRock, as an example, holds the third-largest chunk of Samsung Electronics with its 5% stake.
See additionally: What’s the best Android phone?
Who makes selections at Samsung?
Now that we all know the reply to who owns Samsung, what about day-to-day decision-making? It’s sophisticated. Though Samsung’s company construction retains the Lee household largely in management, it doesn’t all the time work of their favor.
In 2017, Lee Jae-yong was discovered responsible of bribery and corruption expenses after he donated thousands and thousands to sway key members of the federal government, together with the nation’s then-President Park Geun-hye. However whereas he was initially meant to serve 5 years in jail, Lee’s sentence was commuted solely a 12 months later. Notably, Lee Jae-yong hadn’t assumed the function of Samsung’s chairman but, regardless that he made key selections.
Samsung’s present chairman was despatched to jail for bribing a former South Korean President.
The scandal re-emerged in 2020, when South Korea’s Supreme Court docket reopened the case. Lee was then despatched again to jail to serve the rest of his sentence. Nonetheless, he was later launched on parole after which pardoned by the President in a bid to “overcome the financial disaster” and revitalize the South Korean economic system after COVID-19.
Lee Jae-yong was formally sworn in as Samsung’s chairman in October 2022. Previous to that, he served as the corporate’s de facto chief following his father’s coronary heart assault and subsequent coma in 2014.
Can I purchase Samsung inventory? Will the corporate ever be taken non-public?
Eric Zeman / Android Authority
As talked about above, a handful of Samsung Group’s subsidiaries are publicly traded corporations. Which means anybody should buy their shares on the inventory market. Nonetheless, Samsung shares don’t commerce on American inventory exchanges just like the NYSE, making it barely tougher for the typical individual to take a position.
To purchase Samsung shares, you’d need to open a South Korean brokerage account or discover a native financial institution that can course of the transaction. Bigger traders sometimes commerce over-the-counter with such monetary establishments. You will discover extra particulars on Samsung’s investor relations web site.
Should you do not need to open a South Korean brokerage account, you’ll be able to not directly add Samsung to your funding portfolio through an ETF.
Should you merely need some publicity to Samsung in your portfolio, you may as well spend money on an exchange-traded fund (ETF) as a substitute of shopping for particular person shares. The iShares Asia 50 ETF (ticker AIA), for instance, has a ten% publicity to Samsung Electronics. The latter is liable for making many merchandise you’re acquainted with, from the Galaxy S22 series to dwelling home equipment.
As for whether or not the corporate will ever be privately owned once more, it’s unlikely given the sheer worth of its subsidiaries. With a market capitalization of over 300 billion, Samsung is among the largest corporations on this planet. For some context, Elon Musk had to pay $45 billion to buy Twitter and take it non-public. And even that required artistic accounting with financial institution loans, disposal of Tesla shares, and help from present massive shareholders.
See additionally: How to invest, starting with $100
Samsung Group is headquartered in South Korea. The corporate operates many native and worldwide subsidiaries throughout industries like electronics, finance, and logistics.
With a market cap of over $2 trillion, Apple at the moment holds the title of the world’s Most worthy firm. Samsung’s $300 billion market cap is way smaller, however it nonetheless ranks throughout the high 30 Most worthy corporations worldwide.
Samsung’s present chairman, Lee Jae-yong, was sentenced to jail in 2017 for bribing South Korean politicians, together with the nation’s former President. Nonetheless, he was later launched on parole and pardoned.