[Asia Economy Reporter Hyunseok Yoo] Jaan Group, selected as a prospective unicorn company by the government last year, is set to become a major shareholder of MP Hangang.
MP Group announced on the 9th through a disclosure that it has signed an agreement to sell 26.2% of its shares in MP Hangang to Jaan Group, the KOSDAQ-listed company Jaan, and Jaan Holdings.
The sale amount for 21.83% of MP Hangang shares is a total of 25 billion KRW, of which 5 billion KRW, corresponding to 20% of the total payment, will be paid immediately, and the remaining 20 billion KRW will be paid after a two-week due diligence is completed. Once the due diligence is completed and the main contract is signed, Jaan and Jaan Group will secure 21.83% of MP Hangang shares. In addition to these two companies, Jaan Holdings will acquire 4.37% (3,485,392 shares) of MP Hangang shares for 5 billion KRW. Ultimately, the three companies?Jaan, Jaan Group, and Jaan Holdings?will secure MP Hangang shares in a consortium form, becoming the largest shareholders.
Through this sale of MP Hangang shares, MP Group has secured additional cash for business normalization. Previously, MP Group raised about 25 billion KRW through treasury stock sales and a third-party allotment capital increase last year. Including the 30 billion KRW from the MP Hangang share sale, the funds for business normalization and new ventures such as K-Food amount to 55 billion KRW.
Since last year, MP Group has been steadily considering the sale of its subsidiary MP Hangang’s shares as part of non-core asset sales, but due to management difficulties and suspension of stock trading leading to a decline in external credibility, it had not come to fruition. However, the company explained that with the appointment of Chairman Yang Hee-kwon of Pelicana as CEO in December and the resumption of stock trading, a new turning point for the sale of MP Hangang shares was created. MP Group contacted multiple potential buyers of MP Hangang shares from December to recently and ultimately chose Jaan Group.
Founded in 2011, Jaan Group specializes in the sales and distribution of global top brands. In particular, it focuses on the global fashion beauty e-commerce platform (Selecton) business. The company holds domestic distribution rights for famous overseas fashion brands such as Marc Jacobs and Timberland and started the K-Beauty luxury cosmetics distribution business in 2017. It currently owns cosmetic brands such as Idrogen and Gentle Camo.
With this acquisition of MP Hangang shares, Jaan Group is expected to make a full-scale entry into the women's color cosmetics market. MP Hangang, which has a diverse brand portfolio centered on makeup, recorded annual sales of 48.1 billion KRW in 2019 and achieved cumulative sales of 23.8 billion KRW in the third quarter of last year despite difficulties caused by COVID-19.
Jaan Group, which will secure the largest shareholder status of MP Hangang in the future, recorded sales of 49.6 billion KRW and an operating profit of 14.9 billion KRW in 2019.
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