Jungheung cuts Daewoo E&C acquisition price by $180 mn

KDB Investment, in an announcement on July 5, has confirmed Jungheung Construction Co. as the preferred bidder for the acquisition of Daewoo Engineering & Construction Co. 

KDB Investment, an investment unit under the state-run Korea Development Bank (KDB), is the majority shareholder of Daewoo E&C with a 50.75% stake in the company.

In the bidding held on June 25 to acquire all of KDB Investment’s shares, Jungheung had written the winning number at 2.3 trillion won ($2.03 billion) followed by another bidder DS Networks consortium’s 1.8 trillion ($1.59 billion).

However, the large discrepancy in their bidding prices had immediately fueled complaints from both Jungheung and DS Networks, culminating in KDB Investment’s decision to settle the final price through price revisions.  

In the revision round, Jungheung won again by writing down 2.1 trillion won ($1.86 billion), which became the final winning price, whereas DS Networks wrote 2.0 trillion won ($1.78 billion).

In short, Jungheung was able cut the acqusition price by 200 billlion won ($177 million) from its original bid on June 25.  

“It’s not another round of bidding. But simply put, it is more of a price adjustment session. Jungheung was the one that wanted to adjust the price, so we also asked the consortium led by DS Networks if it also wanted to adjust the price,” said KDB Investment CEO Lee Dae-hyun.

Write to Sang-eun Lee at selee@hankyung.com
Daniel Cho edited this article.