By Staff writer
Deal will not immediately affect the joint venture between Arabtec and Samsung Engineering
Samsung Heavy Industries will absorb Samsung Engineering for about $2.5 billion, the latest step in a restructuring at South Korea's largest conglomerate that has accelerated since the controlling Lee family's patriarch was hospitalised in May.
The move is hoped to improve the management of large-scale projects, including in the Middle East, according to a report in The National newspaper.
“Samsung Group is making adjustments to its various businesses, looking for either vertical integrations or moving pieces around for other purposes," Chung Sun-sup, chief executive of corporate research firm Chaebul.com told Reuters.
“The key purpose is to lay the groundwork that will make it easy for the Lee heirs to divide the inherited assets or separate out their own turfs within the group after they take control,” he said.
A Samsung spokesperson told The National that the deal will not immediately affect the joint venture between Arabtec and Samsung Engineering.
The companies launched the venture last year aimed at bidding for large-scale projects in oil and gas, power and infrastructure in the Middle East and North Africa.
Arabtec management reaffirmed its commitment to the venture earlier this year following the resignation of its chief executive Hasan Ismaik.