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M&A Deal briefs

IMM Private Equity to set up operation-focused unit

Dec 01, 2020 (Gmt+09:00)

Sang-eun Lucia Lee
This is the first in our bi-weekly Deal briefs series, covering the latest M&A deals and key events in South Korea’s capital markets.

We will keep you updated with the latest, behind-the-scenes deal news in Asia’s fourth-largest economy.


IMM Private Equity

Seoul-based IMM Private Equity is preparing to launch an operation unit in charge of managing portfolio companies early next year. Its growing AUM of over 4 trillion won ($3.6 billion) and diversified portfolio increased the need for an operation-focused entity. Executive Director Eugene Kim will lead the new entity, following her three-year stint as Hollys F&B CEO – until the private equity firm sold the coffee house chain to South Korea’s KG Group this year.

Doosan Group restructuring

The final bidding process for a 36.07% stake in Doosan Infracore Co. kicked off on Nov. 24. The competition has drawn only two bidders – Hyundai Heavy Industries Holdings Co. and Korean construction materials maker Eugene Group. The outcome of the final bidding round is due in the coming weeks.

Doosan Group Chairman Park Jeongwon and other family shareholders donated a combined 23% stake in Doosan Fuel Cell Co. to cash-strapped Doosan Heavy Industries & Construction Co., on Nov. 26. The share donation was worth 606.3 billion won, based on the Nov. 26 closing price, and followed a 48% surge in Fuel Cell's share price so far this year. It was aimed at improving Doosan Heavy’s financial conditions with increased shareholdings; a gesture of responsibility by the family owners for the power plant builder’s financial difficulty.

Doosan Heavy is set to raise 1.2 trillion won in a Dec. 24 rights offering., which will wrap up the group's self-rescue plan under which it pledged to raise 3 trillion won in fresh capital.  

The group’s baseball team Doosan Bears, which the parent group once considered putting up for sale, finished runner-up in the 2020 Korean baseball championships in November.

LG Group spin-off

LG Group is spinning off its trading arm LG International and four other units into a new business group led by Chairman Koo Kwang-mo’s uncle, Koo Bon-joon. The group’s holding firm LG Corp. approved the hive-off of the five units – LG International, LG Hausys Co., Silicon Works Co., Pantos Logistics Co. and LG MMA Corp. – at a board meeting on Nov. 26.

LG Hausys

In relation to the spin-off, LG Hausys is tapping Hyundai BNG Steel Co. and KCC Corp. to sell its automotive materials business. Market talk is that some progress has been made in negotiations with Hyundai BNG in a deal managed by Bank of America, but closing the deal is expected to take more time. 

Delivery Hero’s $4 bn Korean deal faces regulatory hurdle

South Korea anti-trust body has put a brake on the proposed $4 billion acquisition by Germany’s Delivery Hero SE of South Korea’s No. 1 delivery app operator Woowa Brothers Corp. In November, the Korea Fair Trade Commission ordered Delivery Hero to sell its Korean food delivery service provider, ranked second in the market, as a condition for the purchase of the sector leader.

Kim & Chang, South Korea’s top law firm, is advising Delivery Hero on anti-trust issues surrounding the deal.

Shipbuilding and shipping deals

STX Offshore & Shipbuilding: A consortium of Korean bad asset management firm Uamco and Seoul-based KH Investments was picked as a preferred buyer of the beleaguered shipbuilder.

Shinhan Heavy Industries: Offshore plant equipment maker, which Daewoo Shipbuilding & Marine Engineering Co. acquired in 2007, was put up for sale after it was placed under court receivership in 2018.

Hanjin Heavy Industries & Construction: Six preliminary bidders have been conducting due diligence on Hanjin Heavy. The final bid round is set to kick off in December 2020.

Samsung Fire & Marine Insurance’s Chinese unit
Samsung Fire & Marine Insurance Co. said on Nov. 26 that it will sell a 63% stake in its fully owned Chinese arm to Tencent Holdings Ltd. and four other Chinese investors to make it a joint venture.

After the stake sale, Samsung Fire will hold a 37% stake and Tencent 32%. The Korean insurer aims to aggressively expand into China’s auto and health insurance markets by tapping into Tencent’s online platform and sales network.

O-House

Home interior design app O-house, owned by Bucketplace Inc., has received $70 million in a round of series C funding from US technology investment firm Bond.

Buoyed by increased downloads and a rise in furniture shopping through the interior platform in the stay-at-home trends, the latest funding round valued the startup at as much as 800 billion won, a step closer to becoming a unicorn, or a privately-held company valued at over $1 billion. Earlier this year, its enterprise value was estimated at 100 billion-200 billion won.
 
Tal-Ing

Megastudy Co., South Korea’s leading education service company, has invested 6 billion won in education startup Tal-Ing to become its No. 2 shareholder. The company's name, Tal-Ing, is a portmanteau combining "teaching" and "learning."

KakaoBank

Hong Kong-based Anchor Equity Partners has agreed to invest 250 billion won ($226 million) to buy new shares in South Korea’s KakaoBank, a week after TPG injected the same amount into the mobile banking app in a pre-IPO investment. Once listed, the mobile banking app’s value is estimated to rise to 10 trillion won, similar to the market capitalization of Korea's leading banking group Hana Financial Group.

Write to Sang-eun Lucia Lee at selee@hankyung.com

Yeonhee Kim edited this article.

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