Samsung Family Member Launches $2.1 Billion Share Sale to Cover Inheritance Tax
Quick Reads
- Samsung Electronics shareholder Shinhan Bank has launched a $2.1 billion block sale of 15 million common shares in the South Korean tech giant.
- The sale is on behalf of Hong Ra-hee, mother of Samsung Chairman Jay Y. Lee, to cover inheritance tax payments and loan repayments.
- The offering price range of 204,395 won to 208,605 won per share represents a discount of 0.9% to 2.9% to Wednesday’s closing price.
- The deal is one of the largest block sales in South Korean history and includes an additional $19 million worth of preferred shares.
A member of South Korea’s richest family has launched a $2.1 billion sale of Samsung Electronics shares, one of the largest block offerings in the country’s history, to settle a massive inheritance tax bill stemming from the 2020 death of patriarch Lee Kun-hee.
Shinhan Bank is offering 15 million Samsung Electronics common shares on behalf of Hong Ra-hee, the wife of the late Samsung chairman, according to a term sheet seen by Reuters and confirmed by Bloomberg. The shares amount to about 0.25% of Samsung Electronics’ total outstanding common stock.
The offering price range has been set at between 204,395 won and 208,605 won per share, representing a discount of 0.9% to 2.9% to the stock’s Wednesday close of 210,500 won. The seller is also conducting a separate sale of 206,633 preferred shares, amounting to roughly $19 million, according to the term sheet.
Hong Ra-hee signed a securities disposal trust agreement with Shinhan Bank in January, according to a regulatory filing, which specified the sale’s purpose as “tax payment and loan repayment.” The family of late Samsung patriarch Lee Kun-hee has been paying the inheritance tax in instalments over five years since 2021.
South Korea imposes steep inheritance taxes on controlling shareholders of major conglomerates, delivering a significant financial burden to many of the nation’s wealthiest families. Lee Kun-hee died in 2020 at age 78, leaving his family with one of the largest-ever inheritance tax bills in the country.
The sale is being managed by a syndicate of global and local banks. Bank of America, Citigroup, JPMorgan Chase, Shinhan Securities and UBS Group are serving as joint bookrunners, according to the term sheet.
Samsung Electronics declined to comment on the transaction. Shinhan Bank could not be reached outside of business hours.
The offering comes as Samsung Electronics faces a challenging market environment, with memory chip demand fluctuating and increased competition in contract chip manufacturing. The stock has fallen approximately 15% over the past 12 months, underperforming the broader KOSPI index.
Market Snapshot
- Offering size: 15 million common shares (~$2.1 billion)
- Price range: 204,395 won – 208,605 won per share
- Discount to market: 0.9% – 2.9%
- Preferred shares also offered: 206,633 shares (~$19 million)
- Seller: Hong Ra-hee (mother of Samsung Chairman Jay Y. Lee)
- Purpose: Inheritance tax payment and loan repayment
- Joint bookrunners: Bank of America, Citi, JPMorgan, Shinhan Securities, UBS
- Samsung Electronics 12-month performance: Down ~15%
