[Initial View] Excavator and Noisy Empty Cart

'Plan B' Remaining Doosan Business Restructuring
Effectively Admitting the Reality of Affiliates Except Bobcat
Genuine Business Discovery Needed Over Trick Mergers

"The only profitable company is Bobcat."

Recently, regarding the Doosan Group's business structure reorganization scenario that stirred up the capital market, a business insider familiar with the group's affairs evaluated it this way. They said that although various arguments are made about business structure reorganization, securing financial soundness, and merger ratios stipulated by the Capital Market Act, ultimately, among Doosan Group affiliates, there is no company with actual business performance and competitiveness, so they keep maneuvering around the only 'profitable' Doosan Bobcat.

Original Plan for Restructuring Doosan Group's Business Structure

He advised not to be distracted by flashy words but to look at the numbers. The holding company Doosan Corporation owns Doosan Enerbility (30.39% stake), which produces nuclear power equipment, and Doosan Robotics (68.19%), which makes collaborative robots, as subsidiaries. Doosan Bobcat, which manufactures small excavators, is a subsidiary of Doosan Enerbility and a grandchild company of Doosan Corporation.

Looking at the performance, last year Doosan Corporation's total operating profit was 1.4363 trillion KRW, and during the same period, Doosan Bobcat alone earned 1.3899 trillion KRW (operating profit). Doosan Enerbility's operating profit was 1.4673 trillion KRW, but the operating profit earned independently excluding subsidiaries like Doosan Bobcat was only 454.9 billion KRW. Doosan Robotics, which is seeking a merger with Bobcat, is a deficit company. It posted an operating loss of 19.2 billion KRW last year.

If you were the major shareholder of Doosan Corporation, where would you want to place Doosan Bobcat? Would you want to keep this cash-generating prime company as a subsidiary of Doosan Enerbility, where you hold a 30% stake, or under Doosan Robotics, where your stake is close to 70%? Furthermore, would you want to make it a direct subsidiary to receive dividend income directly?

Doosan Group chose the path favorable and convenient for the major shareholder. However, as widely known, the Doosan Robotics-Bobcat merger project announced by Doosan Group was unilaterally disadvantageous to the shareholders of the listed companies Doosan Enerbility and Doosan Bobcat. The plan to merge the undervalued Bobcat, a prime company generating over 1 trillion KRW in annual profit, with Robotics, a deficit company with uncertain future value but highly valued as a robot-themed stock, at market price, drew strong criticism from capital market participants. Shareholder groups opposed it, and even the Financial Supervisory Service pressured Doosan. After several rounds of disputes, the original plan to merge by stock exchange was withdrawn. However, the 'Plan B' to separate Bobcat from Doosan Enerbility and place it under Robotics remained.

Then why does Doosan Group push such a reckless plan despite receiving criticism from investors and authorities? From one perspective, for minority shareholders, it is maximizing the major shareholder's benefit, and from the group's perspective, it is a business restructuring for financial improvement and new business investment. A more fundamental and cold evaluation is also possible. Through the recent series of events, Doosan Group has earned a malignant label as a corporate group neglectful of protecting shareholders who trusted and invested in the company. But an even bigger problem is that this has loudly advertised that, except for Bobcat, the affiliates in Doosan Group's current portfolio lack core competitiveness or strong growth engines. Doosan Group should have devoted several times the time, cost, and effort spent on the 'tricky' merger plan to genuinely discovering new businesses. In the sharp and cold capital market, companies that cannot make money are ignored.