'Daewoo Industrial Development' Emerges as Leading Candidate to Acquire Doosan Construction

Exodium Central Dongin, Dongin-dong, Jung-gu, Daegu

[Asia Economy Reporter Moon Jiwon] Daewoo Industrial Development, emerging as a strong candidate for acquiring Doosan Construction, is a company separated from the former Daewoo Motor Sales. It is a firm primarily engaged in housing projects centered in provincial areas, promoting the apartment brand 'iaan'.

Originating from Handok General Construction, formerly part of the Handok Industrial group, it was acquired by the Daewoo Group in early 1997, just before the Asian financial crisis, and operated as the construction division of Daewoo Motor Sales.

Later, at the end of 2011, when Daewoo Motor Sales entered court receivership, the construction business was acquired by Fenghua Group, a Chinese hotel and real estate development company, and was renamed Daewoo Industrial Development. If Daewoo Industrial Development ultimately acquires Doosan Construction, it will be the first case of Chinese capital acquiring a major domestic construction company ranked within the top 50 in construction capability evaluation.

Daewoo Industrial Development launched the apartment brand 'iaan' and introduced the premium residential brand 'Exordium' in 2006. However, it mainly conducted housing projects in provincial areas and did not achieve significant results in the metropolitan area. As of last year, its construction capability evaluation ranking was 95th. Last year's sales amounted to 305.6 billion KRW, with operating profit and net income at 7 billion KRW and 10.4 billion KRW respectively, marking a sharp decline of 61.7% and 52.7% compared to the previous year.

The move to acquire Doosan Construction is also understood to be based on the judgment that growth is limited with the existing brand recognition, and the plan is to create synergy effects through the acquisition. If Daewoo Industrial Development, currently ranked 95th, acquires Doosan Construction, ranked 23rd in construction capability evaluation, its ranking will immediately rise to around 18th in the industry.

In fact, Doosan Construction has been steadily building recognition by conducting housing projects in the metropolitan area, including Seoul, through its housing brand 'we've'. It entered the premium apartment market with 'Doosan We've The Zenith' and has also built a track record in urban redevelopment projects. Industry insiders expect few buyers considering asset status and market conditions, but Doosan Construction's recent spin-off of potential bad assets seems to have attracted Daewoo Industrial Development's interest.

Meanwhile, Daewoo Industrial Development has confirmed that the acquisition is underway but stated that it is difficult to verify the current level of negotiations.

This content was produced with the assistance of AI translation services.