Choi Tae-won, "For Samsung Electronics to be Global Top, Korean Companies Must Become Second Tier"
Park Jung-ho SKT Vice Chairman Creates Hynix Acquisition Structure Saying It's for National Key Industries
On the 29th, at the Sangui Hall in Jung-gu, Seoul, Choi Tae-won, the newly appointed chairman of the Korea Chamber of Commerce and Industry, is delivering a greeting during the 'Non-face-to-face Town Hall Meeting' held in lieu of the inauguration ceremony. March 29, 2021 Photo by Joint Press Corps
[Asia Economy Reporter Hwang Yoon-joo] "The acquisition of Hynix is for the national economy. Anyone can say that the financial burden is too great to make the acquisition difficult. A leader must have a long-term vision."
SK Group Chairman Chey Tae-won’s foresight is being revisited within the group. This was what Chairman Chey said when he called CEOs to persuade them amid strong internal opposition during the acquisition of SK Hynix (formerly Hynix) in 2011.
A senior SK official said, "In the current situation where uncertainty has increased after COVID-19, we are re-evaluating Chairman Chey’s leadership," adding, "The acquisition of SK Hynix, which everyone was negative about 10 years ago, has now become a 'masterstroke'." SK Hynix achieved an 'earnings surprise' with an operating profit of 1.3244 trillion won and sales of 8.4942 trillion won in the semiconductor off-season first quarter. These figures represent increases of 65.6% and 18%, respectively, compared to the same period last year.
The history of SK Hynix dates back to 2011. SK Group acquired SK Hynix through SK Telecom. The acquisition was a significant burden even for large corporations at the time. The purchase price reached 3 trillion won, and after the acquisition, several trillion won had to be invested annually in facilities. Since it was right after the 2008 global financial crisis, no one was willing to make a hasty acquisition. LG, GS, and Hanwha, which were mentioned as potential buyers, openly expressed their reluctance even to be named in acquisition rumors. Naturally, there was strong opposition within SK as well.
A senior SK Innovation official said, "Chairman Chey, who was the owner at the time, could have unilaterally ordered the CEOs to proceed with the acquisition, but he did not. He persuaded the CEOs at executive meetings about why the acquisition of SK Hynix was necessary and what vision he had for the acquisition."
The first CEO to be persuaded was Park Jung-ho, Vice Chairman of SK Telecom. Chairman Chey said at the executive meeting, "This is not only for SK’s future but also for the national key industry," adding, "For Samsung to maintain its global top position in the semiconductor market, the secondary tier must be supported by Korean companies. If that happens, Korean companies can jointly lead the semiconductor market." Vice Chairman Park is known to have changed his mind after hearing this. He then directly reported the acquisition structure and business plan of SK Hynix to Chairman Chey and successfully completed the acquisition.
Since then, Chairman Chey has presented management themes such as 'social value' and 'deep change,' laying the foundation for ESG (environmental, social, and governance) management early on. When he proposed in 2015 that economic and social values should be pursued simultaneously, it was unfamiliar to many, but now ESG management is the trend. Last year, Chairman Chey presented a new management theme called 'Financial Story.' The Financial Story is a strategy to enhance trust by presenting the growth strategies of each SK Group company to various stakeholders such as investors, markets, and customers.
Recently, global institutional investors have been actively voicing concerns against companies engaged in unethical investments or management, making it difficult for businesses to succeed without gaining the trust of market stakeholders. Representative examples include global 'big players' like the Dutch pension fund pressuring related companies after the Myanmar military coup, and global customers demanding eco-friendly energy facilities.
A business community official said, "SK Group is also ahead in governance. The group has significant management autonomy through the SUPEX Council, and affiliates operate through their boards of directors," adding, "Chairman Chey Tae-won’s leadership plays a major role in SK Group’s stable management among the top four conglomerates."
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