[Click eStock] "Dongwon Industry Business Restructuring, Food Overseas Expansion Becomes Visible"

On the 15th, Hana Securities analyzed that Dongwon Industrial's decision announced the previous day to incorporate Dongwon F&B as a 100% subsidiary is positive in terms of expanding the number of circulating shares.

Earlier on the 14th, Dongwon Industrial disclosed that it would purchase the remaining approximately 25% stake in Dongwon F&B to make it a wholly owned subsidiary. The exchange ratio between Dongwon Industrial and Dongwon F&B was set at 1:0.9150232. Shareholders opposing this stock exchange can exercise their right to request a buyback from June 11 to July 1. The buyback price is 35,024 KRW for Dongwon Industrial shares and 32,131 KRW for Dongwon F&B shares.

After the stock exchange, Dongwon Industrial will operate various businesses including distant-water fishing, processing, logistics, packaging, feed, and food ingredients. The company stated that it will reorganize its business divisions into marine fisheries, global logistics, global food, and packaging to create synergy across diverse business areas. Dongwon F&B will be reorganized into the food division along with Starkist and Dongwon Home Food.

Analyst Sim Eun-joo said, "The minimal overseas presence of Dongwon F&B has been a factor for valuation discounts, and despite Dongwon Industrial owning Starkist, which holds a 45% market share of canned tuna in the U.S., synergy within the group has been limited," adding, "Active overseas expansion plans in the food division are expected to become visible."

This incorporation of Dongwon F&B as a subsidiary is positive in terms of expanding Dongwon Industrial's circulating shares. The proportion of other shareholders excluding major shareholders and related parties was only about 14%. Hana Securities estimated that, assuming no stock buyback requests, if approximately 4.52 million new shares are issued, the proportion of other shareholders would expand to about 23%.