South Korea's Samsung SDI to acquire materials unit Cheil Industries

SEOUL, March 31 Sun Mar 30, 2014 9:31pm EDT

SEOUL, March 31 (Reuters) - Battery maker Samsung SDI Co plans to acquire electronics materials affiliate Cheil Industries Inc by their swapping shares, in the latest restructuring of South Korea's biggest conglomerate, Samsung Group.

The group, whose around 435 trillion won ($407 billion) in assets spans handsets to ship building to medical services, is restructuring ahead of a widely expected transfer of ownership to the third generation of the founding family.

Lee Kun-Hee, 72, chairman of group crown jewel Samsung Electronics Co Ltd, has in recent years promoted his children to top positions and shuffled affiliates.

Son Jay Y. Lee is vice chairman of Samsung Electronics, elder daughter Boo-jin leads Hotel Shilla Co Ltd, and younger daughter Seo-hyun is president of Samsung's fashion business.

Cheil Industries started in textile and fashion before selling that business to unlisted affiliate Samsung Everland for 1.05 trillion won late last year, to focus on electronics materials and chemicals.

SDI will acquire Cheil by offering Cheil shareholders 0.44 SDI share for each Cheil share they own.

"The acquisition will help Samsung SDI have better access to Cheil's electronics materials assets and thus help improve our competitiveness, and enable Cheil to expand its customer base beyond electronics companies to the auto industry," SDI said in a statement on Monday.

The merged company will have annual sales of around 10 trillion won, which SDI aims to boost to more than 29 trillion won by 2020, the company said in the statement.

Shares of Samsung SDI rose 4.6 percent and Cheil gained 3.5 percent after the announcement, compared with a flat benchmark index.

Samsung has made a flurry of restructuring moves in recent years. In 2013, unlisted screen manufacturer Samsung Display sold its stake in a glass venture to Corning Inc, and unlisted IT services company Samsung SDS bought network equipment provider Samsung SNS.

($1 = 1069.3000 Korean Won) (Reporting by Miyoung Kim; Editing by Christopher Cushing)

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