Samsung chief boosts direct stake with billion-dollar family deal

Samsung Electronics Chairman Lee Jae-yong is planning to strengthen his direct stake in the company by acquiring 7.19 million shares from his mother, Hong Ra-hee.

The purchase is valued at 1.94 trillion won (approximately $1.45 billion), according to a regulatory filing released by Samsung Electronics this week and reported on by Korean media outlets.

It will be carried out as an off-market transaction and is expected to take place on October 12. However, the company noted that both the disclosed price and the number of shares involved could still be changed in accordance with applicable regulations.

If the transaction goes ahead as planned, Lee’s direct holdings in Samsung Electronics will increase from 97,551,953 shares to 104,740,746 shares. His stake in the company, calculated on the basis of all outstanding common and preferred shares, would consequently rise from 1.47% to 1.58%.

The deal will take place within Samsung’s controlling family, with the shares moving from Hong to Lee rather than being sold to outside investors on the open market. As a result, while Lee’s direct ownership will increase, the overall holdings of Samsung’s largest shareholder and related parties are expected to remain effectively unchanged.

Hong’s recent sales of Samsung Electronics shares have been closely linked by market observers to the family’s efforts to meet a large inheritance-tax obligation that arose following the 2020 death of Lee Kun-hee, the late chairman of Samsung Group. The family was faced with an inheritance-tax bill of roughly 12 trillion won and completed its five-year installment payments earlier this year.

In April, Hong sold 15 million Samsung Electronics shares in a block transaction worth approximately 3.08 trillion won. That sale was made under a trust agreement that specifically identified the payment of taxes and repayment of loans as the purposes of the transaction, providing further context for her recent share disposals.

Samsung has remained in the hands of the Lee family since its founder, Lee Jae-yong’s grandfather, established the company as a small grocery trading business in the late 1930s. Over the decades, the family expanded Samsung into a global industrial powerhouse with interests spanning insurance, memory chips and construction, as well as the consumer electronics business for which the group is now best known.

Rather than relying on a large direct ownership stake, the Lee family maintains control of the wider Samsung group through a complex network of cross-shareholdings.

The ownership structure links the family to Samsung C&T, which in turn has a stake in Samsung Life Insurance, the largest shareholder of Samsung Electronics, with control ultimately extending to the flagship electronics company.

By Nazrin Sadigova