As part of Samsung Group’s efforts to streamline its complex business structure, the conglomerate is seeking to sell its security arm S-1 Corporation to Japanese security firm SECOM, according to industry insiders.

“Samsung is currently realigning its businesses to improve management efficiency and is looking to sell S-1 Corporation to SECOM,” said a Samsung official who declined to be named.

The Japanese security company is the largest shareholder of S-1, holding a 25.65 percent of the Korean firm.

Samsung Group’s five affiliates -- Samsung SDI, Samsung Life Insurance, Samsung Card, Samsung Securities and Samsung Fire and Marine Insurance -- hold a combined stake of 20.93 percent in S-1.

Rumors have been swirling that not a single Samsung affiliate holds the largest stake in S-1 because the security firm is regarded as one of the non-flagship businesses inside the conglomerate.

Since Samsung chairman Lee Kun-hee became bedridden due to a heart attack in May 2014, his son and heir apparent Lee Jae-yong has been speeding up efforts to slim down the conglomerate’s business portfolio, shedding affiliates unrelated to its future growth prospective.

“Except for electronics, financial and biopharmaceuticals, and possibly plant construction businesses, Samsung Group could put up more of its unprofitable affiliates for sale,“ said another Samsung insider.

The rumored sale of S-1 previously surfaced when the firm sold an entire 52.18-percent stake in Secui, its network security business subsidiary, to Samsung SDS, the conglomerate’s information technology solutions developer, in September last year.

The sinking profits of S-1 are also said to be one of reasons behind the possible sell-off of the security firm.

The company saw its net profit in the fourth quarter of 2015 nose-dive to 20 billion won ($16.1 million), a decrease of 34.95 percent from the same period in 2014.

Meanwhile, the Korean conglomerate has reportedly hired Goldman Sachs as the lead financial adviser to sell its advertising unit Cheil Worldwide to French ad giant Publicis Groupe. The Seoul-based advertising firm has already sold an office building to Samsung C&T for 25.6 billion won.

Last Friday, the Samsung vice chairman acquired shares of Samsung C&T and Samsung Engineering, worth a combined 230 billion won, a move seen as strengthening his grip on the conglomerate.

Samsung C&T, a construction and trading firm founded in 1938, is considered the de facto holding company of the nation‘s largest conglomerate, holding significant chunks of shares in other affiliates.

C&T holds 19.3 percent of Samsung Life Insurance, which owns 7.6 percent of Samsung Electronics and shares in other Samsung financial businesses, as well as a stake of 12.6 percent in Cheil Worldwide and 7.8 percent of Samsung Engineering.

By Kim Young-won (wone0102@heraldcorp.com)