Key Family Members Offload Shares to Fulfill Inheritance Tax Obligations
The family of the late Samsung Group chairman, Lee Kun-hee, is preparing to sell approximately $1.2 billion worth of shares in Samsung Electronics and affiliated companies. According to industry sources, the planned sale aims to help settle part of the substantial inheritance tax burden stemming from Lee Kun-hee's passing in October 2020[1][2].
Details of the Block Sale
The block deal is expected to occur at a discount between 1.2% and 2% from Samsung Electronics’ prior closing share price. The sale, scheduled ahead of the market opening, will involve several key family stakeholders:
- Hong Ra-hee (Lee Kun-hee's widow) intends to sell 19.2 million shares, equating to a 0.32% stake in Samsung Electronics.
- Lee Seo-hyun, the chief of the Samsung Welfare Foundation, plans to sell 8.1 million shares (0.14% stake).
- Lee Boo-jin, the CEO of Hotel Shilla, will offload 2.4 million shares (0.04% stake).
Additionally, Lee Boo-jin also seeks to sell holdings in other Samsung affiliates, including
Samsung C&T,
Samsung SDS, and
Samsung Life Insurance[1].
Motivation Behind the Sale
The decision is primarily driven by the necessity to manage inheritance tax payments, which total around
12 trillion won. Since Lee Kun-hee’s passing, his heirs have been paying this massive tax obligation in instalments over a five-year period beginning in April 2021[1].
Share Rally and Market Impact
The sale comes amid a strong rally in Samsung Electronics shares, a trend that may impact both the pricing and execution of the sale. The discounted block deal structure is intended to facilitate swift transaction completion while minimizing broader market disruption.
Background: Samsung's Generational Succession
The Samsung family’s gradual divestment has been under close scrutiny since Lee Kun-hee's death. The bulk of the shares have remained under family control, reinforcing Samsung’s continuity during this succession period. However, the need to fulfill inheritance tax obligations has prompted incremental asset sales over the past several years[1][2].
