Shareholders approve controversial Samsung C&T merger

The merger would consolidate the founding family's control over the Samsung group

One of South Korea's most controversial mergers has been given approval by shareholders of the construction company Samsung C&T.

The deal will see the firm taken over by holding company Cheil Industries, another part of the Samsung group.

The merger is strongly opposed by some of Samsung C&T's shareholders, led by US hedge fund Elliott Associates.

For Samsung's founding family, the move is a crucial step in consolidating control of the conglomerate.

Shareholders in Cheil Industries approved the merger earlier on Friday.

Shares in Samsung C&T fell 10.4% and Cheil Industries dropped 7.7% after the merger was approved.

Power transfer

Elliott Associates, which is the second largest single shareholder in C&T, says the takeover significantly undervalues the company's stock.

The hedge fund had filed several unsuccessful law suits to stop the vote from going ahead.

The takeover is key to consolidating the Samsung founding family's control of the multi-headed conglomerate.

It is of particular significance as it comes ahead of a generational power transfer at Samsung.

The business empire's patriarch Lee Kun-hee has been in hospital since May 2014 and his son Lee Jae-yong is to take a bigger leadership role.