Dongwon Group announced Monday that its holding company, Dongwon Industries, will acquire full ownership of its food affiliate, Dongwon F&B, and merge it with three other domestic and international food subsidiaries into a single division, a move aimed at unifying operations and boosting its global push.
At a board meeting held the same day, Dongwon Industries and Dongwon F&B endorsed a planned stock swap agreement under which Dongwon Industries will issue new common shares to Dongwon F&B shareholders at a ratio of 1:0.915.
According to the group, the merger through the stock exchange is part of a strategic initiative to consolidate the group’s fragmented food operations and drive a broader push into the global food market, thereby enhancing business competitiveness.
Dongwon underscored that global expansion has become essential amid South Korea’s slowing economic growth, sluggish domestic demand and intensifying competition.
Following the merger, Dongwon Industries plans to integrate its food-related affiliates, including Dongwon Home Food, US-based StarKist and Senegal-based S.C.A SA, into a single global food division.
The group aims to increase the portion of overseas food revenue from 22 percent last year to 40 percent by 2030.
As part of the reorganization, Dongwon will consolidate its scattered research and development functions into a unified Global R&D Center. The company also aims to increase its R&D investment from 0.3 percent of total sales last year to over 1 percent by 2030.
“By restructuring our food affiliates, we seek to accelerate global business growth while simultaneously resolving the dual listing structure,” said a Dongwon Group official. “The group will continue to pursue new growth drivers and strengthen shareholder value.”
The two companies plan to hold a shareholders’ meeting on June 11 to approve the swap. The buyback prices have been set in accordance with relevant regulations: 35,024 won ($24.7) for Dongwon Industries and 32,131 won for Dongwon F&B.
The final number of new shares to be issued by Dongwon Industries will be confirmed after the appraisal rights period ends on July 1. Dongwon F&B is scheduled to be delisted from the stock exchange on July 31.
By No Kyung-min (minmin@heraldcorp.com)
