Samsung considering split into two companies, share buyback

South Korean tech giant Samsung Electronics has said it will announce plans to increase shareholder returns on Tuesday, as the company faces calls from US fund Elliott Management to separate into two distinct entities.

The fund, which owns 0.6% of the company, has been applying pressure to Samsung's board since October to split into a holding vehicle and operating company, in order to secure more payouts.

As reported by the Seoul Economic Daily, Samsung is expected to confirm that it will consider the division of the company, as well as a share buyback program for its shareholders.

Samsung were rocked this year after a series of incidents with its flagship Galaxy Note 7 led to the discontinuation of the product and the company admitting the incident would set them back at least $5bn over three quarters.

Other measures have also been put forward by activist group Elliott in order to streamline the company's operations, including the appointment of independent directors and the return of 75% of free cash flow to shareholders.

The split would allow the Lee family to maintain their control over the company, with de facto leader of the group Jay Y Lee having taken over from his father, who had a heart attack in 2014.

"Even if Samsung Electronics does not comment on specifics such as the timing of a split ... the firm will at least say it will implement ownership structure changes in a reasonable manner," HI Investment said on Monday.