Hanmi Pharmaceutical headquarters in Seoul (File photo)
South Korean Hanmi Pharmaceutical Group’s founding family is set to conclude a feud as the group’s top individual shareholder agreed to cooperate with the eldest son who conflicted with his mother.
Hanyang Precision Co. Chairman Shin Dong-guk, the largest shareholder of the holding company of the Korean pharmaceutical conglomerate Hanmi Science Co. with a 12.43% stake, said on Wednesday the founding family does not have any plan to sell Hanmi Pharmaceutical Co. to foreign investors after the agreement.
“All three parties – the mother and daughter, the brothers and Chairman Shin – agreed to join forces through Shin’s mediation, establishing a balanced management group system,” said Lim Jong-yoon, the eldest son of the late Hanmi Pharmaceutical Group Lim Sung-ki, who is currently a director of the holding company.
“We will invest in forming the best human resources with various professional managers including committees and advisory groups, dropping the vertical structure centered on a chairman and chief executive.”
The major drug-making conglomerate has been engulfed in a dispute between the founding family’s two sons – Lim Jong-yoon and Lim Jong-hoon, co-chief executive officer of Hanmi Pharmaceutical Co. — and the brothers’ mother and Hanmi Chairwoman Song Young-sook, who sought the group’s merger with OCI Group, backed by their sister Lim Ju Hyun, the co-president of Hanmi Pharmaceutical Co.
FOUNDING FAMILY NOT TO SELL HANMI PHARMACEUTICAL
Hanyang Precision Chairman Shin Dong-guk (File photo)
Shin, who had sided with the brothers, on July 3 signed a deal to buy parts of stakes held by Song and her daughter for 164.4 billion won ($119.1 million) to support them.
“I made the deal to help (the family) solve the inheritance tax issues and protect Hanmi Pharmaceutical Co.,” Shin said. “None of the founding family has intention to sell Hanmi Pharmaceutical Co.”
The family has been looking for a way to finance their 500 billion won in combined inheritance taxes since the founder died in August 2020.
Shin and the two sons had been in talks with global private equity firms such as New York-based KKR & Co. and US investment firm Bain Capital LP, to sell stakes in Hanmi Science.
In April, The Korea Economic Daily exclusively reported that the sons and KKR were in final negotiations to secure a total 51% stake or more in Hanmi Science in a deal that KKR would buy shares in the holding company and guarantee the sons’ management rights.
The founding family and Shin secured 55.73% stakes in total with the agreement to end the feud. Song has 11.93%, while Lim Ju Hyun, Lim Jong-yoon and Lim Jong-hoon hold 10.43%, 10.14% and 10.8%, respectively.
Song on July 8 said she would step down from the chairwoman in a decision supported by Shin.
By Young-Ae Lee
0ae@hankyung.com
Jongwoo Cheon edited this article.
