Dongwon Industries Co., the holding company of South Korea’s seafood-to-logistics Dongwon Group, will delist its canned tuna-manufacturing subsidiary after acquiring its 100% stake to accelerate its global expansion through more aggressive mergers and acquisitions.
Dongwon Industries on Monday announced in a regulatory filing that its board of directors approved a plan to wholly own Dongwon F&B Co. through a swap deal, in which the parent company will offer 0.9150232 new share of its own for every one share of the F&B subsidiary.
Currently, Dongwon Industries controls 75% of Dongwon F&B.
The stock swap deal will be put up to a vote during the two companies’ shareholder meetings on June 11, and if it is approved, Dongwon F&B is expected to be delisted on July 31, according to the company’s filing.
Owning a 100% stake of Dongwon F&B, Dongwon Industries expects a streamlined decision-making process, allowing it to make prompt business decisions such as mergers and acquisitions under one control tower, a company official said.
GLOBAL PUSH VIA M&AS
Dongwon F&B is Korea’s largest canned tuna manufacturer and has been seeking to break away from Korea-focused business through mergers and acquisitions since it took over StarKist Co., the largest US canned tuna company, for $363 million in 2008.
Sponsored by Dongwon Industries’ ample ammunition, Dongwon F&B is expected to go after M&A targets more aggressively in the global F&B sector.
As of the end of 2024, Dongwon Industries has more than 500 billion won ($350.2 million) in cash and cash equivalents.
Dongwon Group has a track record of expanding its business realms through active M&As.
On top of StarKist, the group acquired domestic packaging materials company Techpack Solutions in 2014 and local logistics company Dongbu Express, now Dongwon Loex, in 2017.
It also attempted to take over Korea’s largest sea carrier HMM Co., Boryung Biopharma Co. and McDonald’s Korea, which all came empty-handed.
Founded in 1969, Dongwon Industries became the group’s holding company after it was merged with the group’s former holding company Dongwon Enterprise Co. in 2022.
Its largest shareholder is Dongwon Group Chairman Kim Nam-jung with a 59.88% stake, followed by his father and the group founder Kim Jae-chul, also the group’s honorary chairman, with 21.29%.
Welcoming the stock swap deal news, Dongwon Industries shares jumped 10.8% to end at 39,900 won on Tuesday, and Dongwon F&B added 1.2% to close at 34,500 won.
By Hanjong Choi
onebell@hankyung.com
Sookyung Seo edited this article.
