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Dongwon's fish-based products Dongwon Group, South Korea’s leading seafood and logistics conglomerate, will undergo corporate restructuring with Dongwon Industries Co. emerging as its new holding company.The group on Thursday submitted to the Korea Exchange a request to absorb unlisted Dongwon Enterprise Co., the current de facto holding company of the group, into Kospi-listed Dongwon Industries.The group estimated the share price of Dongwon Enterprise to be 191,130 won and that of Dongwon Industries at 248,961 won as the basis for the merger of the two companies.The trading of Dongwon Industries shares was suspended following the announcement on Thursday until April 11. The stock finished up 1.5% at 265,000 won on Thursday.“The merger is aimed at streamlining our group’s governance structure, which will allow us to make quick decisions on our M&A activities and better respond to external business conditions,” said a group official.The corporate change will mark the group’s first major restructuring since 2001 when it turned into a holding company structure under Dongwon Enterprise. Dongwon Group Vice Chairman Kim Nam-jung STREAMLININGDongwon Group founder and honorary Chairman Kim Jae-chul currently owns 24.5% of Dongwon Enterprise, while his second son Kim Nam-jung, vice chairman and de facto leader of the group, holds a 68.27% stake in the holding company.Under the current structure, five companies, including Dongwon F&B Co., Dongwon Systems Corp., Dongwon Construction Industries Co. and Dongwon Industries, are placed under Dongwon Enterprise as its subsidiaries. Separately, Dongwon Industries has StarKist and Dongwon LOEX Co., formerly Dongbu Express, under its wing.When the proposed restructuring is completed, all the subsidiaries will be placed under Dongwon Industries, the new holding company.“Vice Chairman Kim has actively pursued M&As in Korea and abroad, including Doosan TechPack, Dongbu Express and Vietnam’s Tan Tien Packaging. Under the streamlined structure, Dongwon will be able to accelerate its M&A bids and make funding efforts much easier,” said an investment banking industry official. Dongwon Group founder and honorary Chairman Kim Jae-chul FROM CANNED TUNA MAKER TO F&B GIANTFor many Koreans, particularly among the older generation, Dongwon is the name of the company that makes canned tunas, for which the food maker is best known for decades.The group’s de facto leader Kim Nam-jung has said he wants his business to be remembered not just as a canned tuna maker but also as a food and beverage giant.In September of last year, Dongwon F&B, the country’s largest producer of canned tuna, said it is strengthening its meat processing and distribution business by entering the business-to-consumer (B2C) sector.The company has already acquired a couple of local food processing companies to grow it as a food giant. Dongwon logo SHARE SPLITIndustry watchers said the merger of Dongwon Enterprise and Dongwon Industries is expected to boost their corporate values.Dongwon Industries plans to conduct a five-to-one share split to make the stock more widely available for retail investors. Under the plan, the face value of a Dongwon Industries stock will change from 5,000 won to 1,000 won.Taking into the share split, the merger ratio of Dongwon Industries and Dongwon Enterprise will be 1 to 3.84.After the merger, Park Moon-su, Dongwon Enterprise chief executive, will take charge of Dongwon Industries, the new holding company, while current Dongwon Industries CEO Lee Myung-woo will run the holding firm’s business operations.In 2021, Dongwon Enterprise, with 6.69 trillion won ($5.46 billion) in total assets, posted 508.7 billion won in consolidated operating profit on sales of 7.6 trillion won.With 3.05 trillion won in assets, Dongwon Industries posted an operating profit of 260.7 billion won on revenue of 2.8 trillion won last year.By Soo-Jung Haagatha77@hankyung.comIn-Soo Nam edited this article.
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