Lee Jae-yong "Next Month Son Jeong-ui's Trip to Seoul... Will Hear Acquisition Proposal from UK Fabless 'ARM'" (Comprehensive)

Return from Latin America and Europe Business Trip on the 21st
Possible Progress in M&A Discussions with UK Fabless ARM

Samsung Electronics Vice Chairman Lee Jae-yong, returning from a business trip to Europe, arrived in Seoul at around 5:50 p.m. on the 21st through the Seoul Gimpo Business Aviation Center (SGBAC) in Gangseo-gu, Seoul, and is responding to questions from the press. (Photo by Moon Chae-seok)

[Gimpo=Asia Economy Reporter Moon Chaeseok] Lee Jae-yong, Vice Chairman of Samsung Electronics, who returned home on the 21st after business trips to Latin America and Europe, hinted that he could meet with SoftBank Chairman Masayoshi Son as early as next month to discuss the acquisition and merger (M&A) of the UK semiconductor intellectual property (IP) company ARM. This suggests that he has taken a step closer to achieving a significant M&A outcome during the final UK schedule that capped off his 14-day trip.

Vice Chairman Lee returned home around 5:50 p.m. through the Seoul Gimpo Business Aviation Center (SGBAC) in Gangseo-gu, Seoul, and responded to reporters' questions about the results of his trip. He appeared before the press dressed in a gray suit, pushing a black travel bag.

Regarding his impressions of the UK trip, Vice Chairman Lee emphasized, "The main purpose was communication with local employees." He said, "The primary purpose of this trip was to encourage our employees who are working very hard for the company and for our country in remote and difficult environments."

He added, "I was appointed as a special envoy to support the bid for the 2030 Busan World Expo, and I planned to go to London after completing my activities, but the schedule changed a bit due to the passing of Queen Elizabeth II. Although I could not attend the funeral of the queen, whom I respect and which was called the 'funeral of the century,' I was glad to be able to pay tribute in the same city."

When asked by reporters whether he had met with ARM management and about the results of new business, he said, "I did not meet with ARM management," but added, "Chairman Masayoshi Son of SoftBank will probably come to Seoul next month, and he might make an (M&A) proposal then, but I am not sure."

Regarding plans to be promoted to chairman within the year, Vice Chairman Lee replied, "I think it is more important for the company to do well," and said "Thank you" before getting into his vehicle and leaving. He engaged in a Q&A session with reporters for about two minutes.

According to the business community on the day, Vice Chairman Lee completed his 14-day schedule and returned home. This trip is expected to be the longest official overseas business trip since October 2018. It is the first time in five years that he has traveled to two continents, North and Central America (Mexico, Panama, etc.) and Europe (UK).

The business community believes that large-scale semiconductor-related M&A discussions likely took place during the 14-day trip, and Vice Chairman Lee hinted on this day that he achieved some results. After announcing on August 12, following the Liberation Day special lottery, that he would "work hard for the national economy," he demonstrated active on-site management both domestically and internationally.

As part of support efforts for the '2030 Busan World Expo' bid, which the government and private sector are fully committed to, he also met with heads of state from various countries, including the presidents of Mexico and Panama. In Mexico, he met with President Andr?s Manuel L?pez Obrador to request support for the expo. In Panama, he appealed for support to President Laurentino Cortizo.

He did not forget communication management with local employees. He visited Samsung Electronics' home appliance factory in Quer?taro, Mexico, and the Samsung Engineering Dos Bocas refinery construction site to encourage employees, and checked on the local automotive electronics business by visiting Harman, an automotive electronics company. He also engaged in communication management with employees of the local Panama corporation. Afterward, he traveled to Canada and then visited the UK, where meetings with Prime Minister Liz Truss and potential M&A discussions with major companies such as ARM were raised, but due to the variable of Queen Elizabeth II’s funeral, it is analyzed that it was difficult to take a public and aggressive approach.

During this trip, Vice Chairman Lee is believed to have sought the overall future strategy of the group under the banner of 'New Samsung.' However, even after returning home, it is widely expected that he will accelerate the resolution of major pending issues such as establishing a control tower for Samsung Group (a top decision-making organizational system similar to the former Future Strategy Office) and restructuring the governance.

The business community believes that he explored comprehensive management strategies to realize the goals he has presented so far, such as New Samsung and 'Seung-eo-bu' (surpassing the father). In his final argument during the retrial of the state affairs manipulation case last year, Vice Chairman Lee stated, "I will create a Samsung that everyone loves and trusts," and added, "This is the consistent dream of entrepreneur Lee Jae-yong and my Seung-eo-bu."

Moreover, there is speculation in the business community that Vice Chairman Lee will be promoted to chairman around the founding anniversary on November 1. Methods discussed include promotion to chairman as a non-registered executive and then becoming a registered director, or returning as a registered director and then assuming the chairmanship. Promotion to chairman requires only board approval, while becoming a registered director requires shareholder approval at the general meeting. Among the four major conglomerates?SK, Hyundai Motor, LG, and Samsung?Samsung is the only one where the owner is not currently chairman.

Escaping the 'judicial shackles' is also a task to be resolved. Trials related to the Samsung C&T-Cheil Industries merger and Samsung Biologics accounting fraud are scheduled for June 22-23. Although a trial was scheduled on the 15th, he applied for non-attendance, allowing for an extended business trip.