Ulsan City Council "Concerns Over Goryeo Zinc Acquisition Attempt... Negative Impact if Taken Over by Chinese Capital"

The Ulsan City Council expressed concerns about the hostile takeover attempt as MBK Partners, the largest private equity fund (PEF) operator in Korea, joined hands with Yeongpung to secure shares in Korea Zinc.

Kim Jong-seop, Acting Chairperson of Ulsan City Council, presiding over the plenary session
Photo by Yonhap News

On the 17th, the Ulsan City Council issued a statement signed by 22 council members, including Acting Chairman Kim Jong-seop.

The council members emphasized, "Korea Zinc is a local company that has been with the citizens of Ulsan for 50 years and is a global enterprise," adding, "If it falls into Chinese capital through a hostile takeover, it will undoubtedly have a detrimental impact on Ulsan's employment market and market order."

They further explained, "Speculative capital neither creates jobs nor maintains employment," and stated, "MBK Partners, backed by Chinese capital, has been criticized and socially condemned for disrupting the market economy through actions such as store closures and restructuring immediately after acquiring Homeplus, and excessive profiteering and dividends imposed on franchisees after acquiring BHC."

They added, "Moreover, in the event of a hostile takeover, concerns grow over the leakage of Korea Zinc's core technologies, the collapse of overseas supply chains in the secondary battery sector, and the possibility that Korea Zinc might be sold to a Chinese company."

The council members said, "We will hold a press conference with local lawmakers and request the government to devise effective countermeasures so that national key industries can withstand indiscriminate attacks from overseas speculative capital," and stated, "The City Council will actively support Mayor Kim Doo-gyeom's efforts to save Ulsan companies and will mobilize all possible means and methods in coordination with local political parties."

Meanwhile, MBK Partners and Yeongpung, the largest shareholder of Korea Zinc, announced on the 13th that they would conduct a public tender offer to secure stable management rights of Korea Zinc.

In response, Ulsan Mayor Kim Doo-gyeom issued an emergency statement on the 16th during the Chuseok holiday, declaring, "We will never tolerate the predatory takeover attempt of Korea Zinc by private equity funds," and expressed his position, saying, "We will join forces with the local business community to launch a 'Buy Korea Zinc Shares Movement' and concentrate the power of 1.2 million citizens."