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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] Taekwang Industrial has lowered the acquisition price for Aekyung Industrial and postponed the transaction’s closing date, reflecting risks stemming from a recent toothpaste recall involving Aekyung’s products.
Taekwang Industrial said on Wednesday it will acquire 8.34 million shares (31.56%) of Aekyung Industrial for approximately 223.75 billion won, revising down the previously agreed price of about 235 billion won by more than 11 billion won. As the deal structure involves acquiring half of the total target stake, the overall transaction value was also reduced to about 447.5 billion won, from roughly 470 billion won.
The scheduled share acquisition date has been pushed back to March 26, from the original date of February 19.
Industry sources said the revised terms reflect the recent voluntary recall of “2080” toothpaste products after a prohibited substance was detected. The potential costs of the recall and reputational damage are believed to have been factored into the adjusted valuation as contingent liability risks.
Taekwang Industrial had paid a deposit of 23.5 billion won, equivalent to 10% of the total acquisition value, when the deal was signed in October last year and has since completed related collateral arrangements.
Aekyung Industrial, which focuses on household goods and cosmetics, posted revenue of about 679.1 billion won and net profit of 42.5 billion won last year.
Taekwang Industrial said the acquisition is part of its strategy to diversify beyond its petrochemical-focused portfolio and expand into K-beauty and consumer goods as new growth engines.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
