[Click eStock] "The Biggest Beneficiary of Doosan Group's Governance Restructuring is Doosan Corporation"

DS Investment & Securities analyzed on the 23rd that the biggest beneficiary of Doosan Group's governance restructuring is Doosan Corporation.

Kim Suhyun, a researcher at DS Investment & Securities, said, "The highlight of this governance restructuring is that Doosan Bobcat, the group's cash cow and former grandchild company, is incorporated as a subsidiary of Doosan Corporation."

This restructuring goes through a total of three stages. In the first stage, through a split, the newly established Enerbility and its subsidiary Bobcat separate from Enerbility and merge with Doosan Robotics. The final stage involves exchanging the remaining 46% of Bobcat's listed shares, now a subsidiary of Robotics, for new shares of Doosan Robotics, making Bobcat a wholly owned subsidiary.

Once this governance restructuring is completed, Doosan Group will have two options regarding Doosan Bobcat: to list Bobcat on NASDAQ or to merge it with Doosan Robotics. Researcher Kim analyzed, "Since this is a merger between a company with 10 trillion KRW in sales and one with 50 billion KRW in sales, in terms of influence and presence, the newly merged company should be regarded as Doosan Bobcat." In conclusion, through all these processes utilizing Doosan Robotics, the group's cash cow Bobcat, which was previously a grandchild company of Doosan Corporation, finally becomes a subsidiary of Doosan.

Kim also noted that the benefits to Doosan Corporation exist both in the short term and long term. If this restructuring succeeds, the short-term benefits include increased control over Bobcat (from the existing 13.8% to 42%) and the inflow of cash dividends from Bobcat's profits. Additionally, the financial stability of Doosan Robotics will be secured. Under the previous structure, if Robotics underperformed compared to plans, Doosan Corporation could have been exposed to risks such as additional resource input. However, with Bobcat, which has sales over 100 times greater than Robotics, acquiring Robotics, Doosan Corporation can mitigate related risks.

If Doosan Robotics and Bobcat merge, Bobcat will effectively become a subsidiary, resolving the M&A regulations that had been a hindrance. Under the Fair Trade Act, a holding company's grandchild company must hold 100% of the shares of the M&A target company. By incorporating Bobcat as a subsidiary of the holding company's subsidiary, it will be exempt from related regulations.

Currently, the stock prices of all three companies slightly underperform the stock purchase request price. Among them, Bobcat has the highest discount rate at 3.3%. In particular, based on the exchange ratio with Doosan Robotics, it is trading at a discount of about 3.1%. Researcher Kim forecasted, "If the Robotics stock price does not fall further, arbitrage through Bobcat purchase is valid," and added, "Even in the worst-case downside risk scenario, the relative performance of Bobcat and Enerbility will be favorable."