Kumho Asiana Gets Daewoo Merger Bid

The Kumho Asiana Group consortium was selected as the preferred bidder for the M&A of Daewoo Engineering and Construction (Daewoo E&C), the largest offering in Korea’s M&A history.

The Kumho Asiana consortium has offered 6.6 trillion won to acquire the creditors’ share of Daewoo E&C (72.1%).

If Kumho acquires Daewoo E&C, Kumho will be elevated from the 11th place to 8th place in terms of assets.

The Public Fund Oversight Committee held a meeting in Bank Hall in Jung-gu, Seoul on June 22 and selected Daewoo E&C as the preferred bidder, who rated top place in the comprehensive analysis. They added points for price and non-price factors. Kumho Asiana Group earned the most points for offering the highest amount of money out of the 5 consortiums competing.

Daewoo E&C’s largest stockholders, Korea Asset Management Corporation and Kumho Asiana Group, will sign a MOU at the end of this month and after due diligence of Daewoo E&C, they will conclude a contract in August.

Kumho Asiana Group stated, “Even if we do acquire Daewoo E&C, we will not go through a merger but continue using the Daewoo brand. We will also not go through employee restructuring, unlike Daewoo E&C labor unions’ concerns.”

The Public Fund Oversight Committee selected Prime Group as a reserve bidder, in case Kumho gives up its right to acquire Daewoo E&C. Doosan Group offered the second highest bid, but their points were deducted due to the Doosan owner family’s private slush funds.

Jin-Young Hwang buddy@donga.com