Samsung Group calls off plan to merge shipbuilding, engineering units

Samsung Group, South Korea's largest conglomerate, called off a plan to merge its shipbuilding and engineering units as more-than-expected shareholders were opposed to the plan, a regulatory filing showed Wednesday.

Samsung Heavy Industries, the world's third-largest shipbuilder, should have bought back 923.5 billion won (840 million U.S. dollars) worth of shares from shareholders opposed to the merger. Investors of Samsung Engineering, the engineering unit, asked the company to buy back 706.3 billion won worth of stocks as they were opposed to the combined entity.

Samsung Heavy and Samsung Engineering said in a Sept. 1 statement that it would scrap the merger should the buybacks top 950 billion won and 410 billion won respectively. If the companies pushed ahead with the merger, the combined entity could have faced liquidity troubles due to the massive buyback requests.

Shares of Samsung Heavy tumbled more than 5 percent after the news, and Samsung Engineering plunged over 7 percent.