Family Feud Ignites Takeover Battle at Korea’s Zinc Giant

A fierce struggle for control has erupted at Korea Zinc, a key supplier to the semiconductor and automotive industries.

The company’s founding families have split over its future direction, with one side backed by a prominent Asian private equity firm.

Korea Zinc’s roots trace back to Young Poong, a metals producer established in 1949 by friends Chang Byung-hee and Choi Ki-ho.

The Choi family has managed Korea Zinc since its 1974 founding, while the Chang family oversees Young Poong. Both families hold similar stakes in Korea Zinc.

Chairman Choi Yun-birm’s group controls 33.99%, while MBK Partners and Young Poong jointly own 33.13%. This ownership structure has set the stage for a high-stakes corporate battle.

The conflict intensified in mid-September when MBK Partners and Young Poong announced a tender offer for Korea Zinc shares. This move caused the company’s stock price to surge by over 30%.

MBK and Young Poong have agreed that the private equity firm would control Korea Zinc post-acquisition.

They recently increased their offer to 750,000 won per share, aiming to purchase up to 14.6% of the company.

Korea Zinc’s management strongly opposes the buyout attempt. They have labeled it a “hostile and predatory” takeover bid by corporate raiders.

The company’s vice chairman, Lee Je-joong, expressed confidence in their ability to fend off the takeover.

Analysts believe MBK and Young Poong hold an advantage due to their substantial cash reserves.

MBK manages over $30 billion in capital, giving them significant financial firepower for the acquisition.

Korea Zinc has raised concerns about the potential sale of its valuable technologies to Chinese buyers if MBK succeeds.

However, MBK and Young Poong have vehemently denied such intentions, pledging to keep the company in South Korea.

The ongoing dispute has drawn attention from financial regulators. The Financial Supervisory Service has warned against market-disrupting activities related to the tender offer.

Family Feud Ignites Takeover Battle at Korea’s Zinc Giant

They have promised swift investigations and strict penalties for any illegal actions. MBK Partners has accused Korea Zinc of distorting media reports about the takeover attempt.

They claim the company misrepresented a Wall Street Journal article to suggest concerns about Chinese involvement in the deal.

The private equity firm emphasizes its commitment to improving Korea Zinc’s corporate governance.

They argue that Chairman Choi has undermined the company’s board and sought to exploit it for personal gain. This corporate battle holds significant implications for South Korea’s industrial landscape.

Korea Zinc supplies crucial materials to major semiconductor manufacturers and plays a growing role in electric vehicle battery supply chains.

As the tender offer deadline approaches, both sides continue to vie for shareholder support. The outcome of this struggle will shape the future of a key player in South Korea’s strategic industries.

The conflict highlights broader concerns about foreign ownership of critical industrial assets.

It also underscores the challenges of balancing corporate governance, national interests, and global competitiveness in today’s interconnected business world.

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