Samsung Group's holding company Cheil Industries Inc said on Tuesday that it will acquire affiliate Samsung C&T Corp by September, the latest step in the restructuring of South Korea's biggest conglomerate.

The move combines what analysts consider as two key companies in the ownership structure of the conglomerate, with heir apparent Jay Y Lee likely to remain as the top shareholder of the merged entity as Samsung Group prepares for the eventual transfer of control from patriarch Lee Kun-hee to his children.

The merged entity will also become the largest shareholder of Samsung's biopharmaceutical business, flagged as a prospective new growth driver for the group.

"There will be a solidification of the ownership structure with Jay Y clearly being the largest shareholder," a person familiar with the matter told Reuters, adding that the merger is consistent with corporate changes over the past 12 months as Samsung Group seeks to ensure a stable transfer of control.

Samsung C&T holds a 4.06 per cent stake in Samsung Electronics, the group's flagship unit. Jay Y. Lee is the vice chairman of Samsung Electronics and his father the chairman.

Under the merger agreement, subject to approval from the two companies' shareholders, Cheil Industries will acquire Samsung C&T by offering 0.35 new Cheil share for each Samsung C&T share. The combined entity will be called Samsung C&T.

Cheil Industries shares rose 10 per cent as of 0054 GMT, while Samsung C&T shares soared 14.7 per cent. The wider market fell 0.3 per cent.

The combined company will target annual revenue of about 60 trillion Korean won ($54.66 billion) in 2020, compared with the two companies' total revenue of 34 trillion won in 2014.

The transaction is expected to be completed on Sept. 1, pending shareholder approval. – Reuters