To secure cash for Samsung SDI's battery investment, it decided to sell the equity it holds in Samsung Display. With a rights offering difficult amid a slump in the electric-vehicle market and shareholder pushback, it is seen as opting to raise funds by liquidating held asset.
On the 19th, Samsung SDI disclosed that it "reported to the board a plan to proceed with the sale of equity in Samsung Display and other assets to secure investment resources and improve the financial structure." Samsung SDI holds 15.2% equity in Samsung Display, which is estimated at more than 10 trillion won based on book value.
Samsung SDI said specific conditions such as the size of the sale and the counterparty to the transaction have not been decided. However, the market assesses there is a possibility it will sell all of the equity.
Samsung SDI moved to sell its "prime asset," equity in Samsung Display, because results deteriorated sharply at a time when large-scale investment is needed.
Samsung SDI plans to invest about 3.2 trillion won this year, following about 6.6 trillion won in 2024 and about 3.3 trillion won last year. Despite massive investment, a large loss was recorded last year due to deteriorating market conditions. Samsung SDI posted a loss of 1.7224 trillion won last year, and it is expected to be difficult to return to profit this year.
Demand for funds for investment is high, but it is a difficult environment to pursue a rights offering. This is because it already raised 1.65 trillion won through a rights offering last year, and authorities and shareholders view rights offerings by large conglomerates unfavorably.
The industry is watching to see who will acquire the Samsung Display equity that Samsung SDI is selling.
The most likely candidate mentioned is Samsung Electronics, which holds 84.8% equity in Samsung Display. If Samsung Electronics acquires all of the Samsung Display equity held by Samsung SDI, Samsung Display will become a 100% subsidiary of Samsung Electronics. With the semiconductor boom continuing, Samsung Electronics is seen as having ample capacity to acquire the remaining equity in Samsung Display.
Moreover, Samsung Display has maintained steady dividends every year based on solid results. For this reason, there is also analysis that domestic and foreign strategic investors could acquire equity in Samsung Display.