[Asia Economy Reporter Seungjin Lee] Aekyung Group has chosen the "chemical business" as its next-generation growth engine. By merging its chemical affiliates to maximize business synergy, the group aims to achieve sales of 4 trillion KRW and operating profit of 300 billion KRW by 2030.
On the 6th, Aekyung Group announced that it has resolved to merge three companies: Aekyung Petrochemical, AK Chemtech, and Aekyung Chemical. As a result, a chemical company within Aekyung Group with annual sales of approximately 1.7 trillion KRW (based on projected 2021 sales), tentatively named "Aekyung Chemical," is expected to be established.
The surviving entity after the merger will be Aekyung Petrochemical. The stock exchange ratio will be 1:0.68:18.26 for Aekyung Petrochemical, AK Chemtech, and Aekyung Chemical, respectively, with 1 new share of Aekyung Petrochemical allocated for every 1.47 shares of AK Chemtech and 0.05 shares of Aekyung Chemical. Each company's board of directors unanimously approved the merger agenda the previous morning. The merger is expected to be completed by November after regulatory corporate combination reviews and shareholder approval at the end of September.
The largest shareholders of Aekyung Petrochemical, AK Chemtech, and Aekyung Chemical are AK Holdings, the holding company of Aekyung Group, holding 49%, 81%, and 100% stakes respectively. The stake of AK Holdings, the largest shareholder of the merged company, will change from 49.44% to 62.23%, with no change in the largest shareholder.
"Aekyung Chemical" plans to enhance synergy after the merger by integrating the capabilities and resources of the three companies: ▲ Aekyung Petrochemical's basic chemical material development and production capabilities and local infrastructure in China ▲ AK Chemtech's high value-added material business capabilities and global sales network including Vietnam ▲ Aekyung Chemical's high value-added product portfolio and small-lot multi-product production capabilities.
The integrated entity will actively pursue strategic tasks such as building a full lineup of major businesses and products after the merger, establishing business models aligned with megatrends, expanding the business model value chain, and advancing research and development (R&D).
Lee Seok-joo, CEO of AK Holdings, stated, "Through this merger decision, Aekyung Group has designated the chemical business as a core business portfolio in the post-COVID-19 era. Amid rapidly changing global market conditions and competition, we will join forces to pioneer new areas and secure an advantage in fierce survival competition. We also plan to enhance corporate and shareholder value by establishing a foundation that meets new standards for corporate responsibility demanded by the times, such as ESG."
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