Lee Jae-yong The Samsung Group's decision to sell off its petrochemical and defense subsidiaries to Hanwha signals the start of a new leaner era under conglomerate heir Lee Jae-yong, industry watchers believe.
This is the first time since the Asian financial crisis that Samsung has sold off so many affiliates at once.
The group's financial situation is not bad enough to explain the selloff by itself, suggesting that it signals a new focus on core business by boldly ditching unprofitable units.
Under Lee’s father Lee Kun-hee, who nominally remains chairman although he is gravely ill, the behemoth was locked in an all-out struggle to become No. 1 in every major sector.
But now industry sources say Samsung is shifting its policy and looks to be benchmarking GE’s growth strategy, under which the U.S. company aggressively bolsters core business with strong growth potential while shedding money-losing units.
By selling off its non-core petrochemical and defense businesses, Samsung can now concentrate on electronics, finance, construction and heavy industry.
Others say the conglomerate wants to shield itself from persistent criticism that it is too greedy and would swallow up all of Korean industry if it could.
But it remains massive. The latest asset sale only reduces the number of Samsung affiliates from 81 to 66.
