Aekyung Industrial Acquired by Taekwang Industrial... Main Contract to Be Signed on the 21st

AK Holdings Board Approves Sale on October 20
Acquisition Price Set at 470 Billion Won, Transaction to Close on February 19 Next Year

AK Holdings, the cosmetics subsidiary of Aekyung Group, has been acquired by Taekwang Industrial. The two companies are set to sign a main contract regarding the sale and acquisition on October 21, and the transaction is expected to be completed in February next year.

According to the Financial Supervisory Service's electronic disclosure system on October 20, AK Holdings held a board meeting and decided to sell its 63.38% stake in Aekyung Industrial (11.9 million shares held by AK Holdings and approximately 4.77 million shares held by Aekyung Asset Management) to Taekwang Industrial. On the same day, Taekwang Industrial also held a board meeting and reportedly approved the agenda related to the acquisition of Aekyung Industrial.

The acquisition price is 470 billion won. At 28,190 won per share, Aekyung Industrial's valuation is estimated to be about 750 billion won. The contract signing is scheduled for October 21, with the transaction expected to be finalized on February 19 next year.

AK Holdings plans to resolve its existing loans, which were secured using Aekyung Industrial shares as collateral, by borrowing funds from Taekwang Industrial. In a public disclosure, Taekwang Industrial announced that it had lent 151 billion won (at an interest rate of 3.76%) to AK Holdings and 60.5 billion won (at an interest rate of 4.6%) to Aekyung Asset Management. An official from AK Holdings explained, "We borrowed funds by entering into a loan agreement with the buyer to release the pledge on the shares in question," adding, "The funds will be used to repay existing borrowings and may be offset against the buyer's obligation to pay the balance."

Previously, AK Holdings selected Taekwang Industrial, T2 Private Equity, and Yuanta Investment consortium as preferred bidders for the sale of its stake in Aekyung Industrial, and signed a memorandum of understanding (MOU) for the stock purchase agreement last month. The companies initially planned to complete board resolutions and finalize the agreement by October 15, but the schedule for the main contract was delayed due to prolonged discussions over legal responsibilities in the contract.

AK Holdings plans to accelerate improvements to the group's financial structure using the proceeds from the sale of Aekyung Industrial. Taekwang Industrial aims to secure new growth engines by entering the K-beauty industry. Currently, Aekyung Industrial is accelerating its overseas expansion, led by the AGE20'S and Luna brands. Although 70% of its export volume is concentrated in China, which has been identified as a weakness, the company is diversifying into the Japanese and U.S. markets.