Samsung Life Insurance and Samsung Fire & Marine Insurance will sell $280 million worth of Samsung Electronics shares.
On the 11th, Samsung Life Insurance announced that it decided to sell 4,252,305 shares (0.071%) of Samsung Electronics for approximately $236.4 million during its board meeting that day. Samsung Fire & Marine Insurance will also dispose of 743,104 shares of Samsung Electronics for $413 million. As a result, Samsung Life Insurance's holdings of Samsung Electronics shares will decrease from 500,944,843 shares, reducing its equity stake from the previous 8.51% to 8.44%. Samsung Fire & Marine Insurance's equity stake will also decrease from 1.49% to 1.48%.
Based on the closing price ($55,700) that day, the amount for the stock disposals by Samsung Life Insurance and Samsung Fire & Marine Insurance is approximately $277.7 million. The actual disposal amount is expected to be determined during the pre-market bulk trading (block deal) process on the 12th. If institutional investors participating in the block deal have a large buying demand, the disposal price will be determined similar to market price, but if the demand is low, the discount rate may increase. Samsung Life Insurance and Samsung Fire & Marine Insurance plan to announce the disposal price that day.
This equity sale is due to Samsung Electronics' stock buyback plan. According to the Act on Structural Improvement of the Financial Industry, financial institutions must obtain permission from the financial authorities or divest if their shareholdings in non-financial companies exceed 10%. Given that Samsung Electronics has announced a plan to buy back a total of $3 billion worth of its own stock, it is unavoidable for Samsung Life Insurance and Samsung Fire & Marine Insurance to divest in order to maintain their equity stakes under the law.
Samsung Life Insurance and Samsung Fire & Marine Insurance explained, "We decided to sell our equity to preemptively address the risk of violating the Financial Holding Company Act."