Dayou Group completes acquisition of Daewoo Electronics
By Jun Ji-hye
Mid-size conglomerate Dayou Group has successfully completed the acquisition of Dongbu Daewoo Electronics by finalizing a deal to purchase an 84.5 percent stake held by DB Group and financial investors.
Ahn Jung-gu, representative director of Daewoo Electronics
Accordingly, Daewoo Electronics held an extraordinary meeting of shareholders and board of directors, Feb. 28, to approve amendments in the articles of incorporation, including a change of its corporate name to Daewoo Electronics.
The meeting also elected Ahn Jung-gu as representative director, and appointed three directors and one auditor.
Dayou Group said business operations of the home appliance manufacturer will be fully normalized this month with the completion of the management team.
The equity acquisition took place through an affiliated investment special purpose company, Dayou SPC.
The group said it has secured the funds for the acquisition and normalization of Daewoo Electronics on time by signing a stock purchase agreement with JS Asset Management for the sale of the group’s subsidiary, Smart Savings Bank, Feb. 28. The transaction amount was 78 billion won ($72 million).
“We will speed up efforts to normalize operations of Daewoo Electronics as sufficient liquidity has been secured from the group’s internal funds and proceeds from the sale of Smart Savings Bank,” a Dayou Group official said.
The group had already taken over the domestic-focused home appliance provider Dayou Winia, known for its Dimchae kimchi refrigerator, in 2014. Kimchi is the nation’s traditional staple side-dish.
The group expressed its intention to become the No. 3 home appliance maker here after Samsung Electronics and LG Electronics by buying Dayou Winia and Daewoo Electronics, whose yearly sales together are about 2 trillion won. Originally, the group focused on making automobile parts.
Dayou Winia specializes in air conditioners and dehumidifiers as well as refrigerators for kimchi. Due to characteristics of its representative goods used to store the Korean traditional food, the firm mostly depends on domestic market sales.
On the other hand, Daewoo Electronics is an export-oriented company mainly producing small- and mid-sized products such as microwaves and washing machines.
Dayou expressed expectation that the acquisition of Daewoo Electronics will raise its competitive power overseas as the company gets around 80 percent of its revenue from markets abroad, especially South America.
The group also said owning the two home appliance providers will create a synergy effect through, for example, joint product development and integrated purchasing of materials.
Earlier, Iranian electronics manufacturer Entekhab was selected as a preferred bidder for the takeover of Daewoo Electronics, worth an estimated 200 billion won.
But the contract fell through due to differences in opinion between the Iranian company and Dongbu stockholders regarding price and conditions, according to industry sources.