||Korea Republic of : SOUTH KOREAN DONGWON GROUP plans a US$421M acquisition to boost its logistics business
||Dongwon Group, a processed food and fisheries conglomerate of South Korea, has plans to buy Dongbu Express, the No.3 player in the domestic logistics industry, as part of its strategy to expand its operational logistics business line under the management of Dongwon Industries Co. and generate synergies with its fishing, food and packing material business activities.
Dongwon Groups holding company Dongwon Enterprise Co. on Tuesday has signed a memorandum of understanding (MOU) with Dongbu Express largest stakeholders KTB Private Equity and Q Capital Partners in order to obtain exclusive rights for negotiation to acquire the entire stake of Dongbu Express.
Dongwon is expected to shell out almost 470 billion won (US$421 million) for the acquisition of the 100% stake of Dongbu Express. But, the terms of the agreement might experience some changes during the ensuing negotiations.
With this purchase, Dongwon Groups logistics division - Dongwon Industries, which usually focuses on fisheries, food and packing business sectors, will get a huge boost.
The Groups logistics arm mostly puts its concentration on small-scale distribution. Apart from delivering logistics services via both land and waterways, Dongbu Express also operates passenger transportation as well as car rental businesses.
In 2015, Dongbu Express announced operating profit and sales of respectively 44.4 billion won (US$39.7 million) and 719.5 billion won (US$708.7 million).
Since Dongbu Express went to the block in 2015, Dongwon Group directed its focus to acquire the firm, revealed a Dongwon Group official. The Group has been successful to reach its goal in its second attempt, as the first move to acquire the company was a failed one over lofty price.
A Dongwon Group official stated, The company expects that the acquisition of Dongbu Express would create synergy effects with existing fishing, food and packing material businesses.
According to an official of the Group, the company is optimistic of accomplishing the M&A by the year end.
Dongwon and the consortium headed by KTB Private Equity and Q Capital Partners will conduct the due diligence and talks over details for an agreement including the sale price.
BACK TO TOP