KT's Koo Hyun-mo: "I am an M&A Expert... Several Deals Expected Next Year" Preview

[Image source=Yonhap News]

[Asia Economy Reporter Seulgina Jo] "I have grown as an M&A expert within the company. Structural changes will be visible in several areas by next year." Ku Hyun-mo, CEO of KT, known as a 'traditional KT man' and 'strategic planning expert,' announced aggressive M&A and structural reorganization starting from his second year in office next year. He also revealed specific listing plans for K-Bank and others incorporated into the group.

On the morning of the 28th at the Grand Intercontinental Seoul during the 'Digital-X Summit 2020' briefing, CEO Ku stated, "We have solved long-standing issues and strengthened our fundamentals. We have also prepared for structural changes," highlighting the achievements since his inauguration in March.

First, he mentioned, "Upon taking office, I thought the first priority was to resolve long-standing issues," citing K-Bank and the cable TV acquisition. Regarding K-Bank, he explained that due to capital increase issues, progress had been sluggish for several years, widening the gap with Kakao Bank, which started the business together, making it the biggest challenge for the group. However, recently, with BC Card becoming the largest shareholder and the successful capital increase, they have been able to breathe a sigh of relief. CEO Ku said, "The cable TV acquisition was important because we wanted to be 'number one in media,'" adding, "We have currently signed a contract to acquire Hyundai HCN and are awaiting government approval."

Following the resolution of old issues, the fundamentals, which he considered the second priority at the time of his inauguration, have also been successfully strengthened. CEO Ku pointed out, "We wanted to decide the direction to move forward, develop capabilities including personnel, and change the way we work," citing AI and cloud workforce development as major achievements. He said, "These are parts that highlight KT's growth potential. We have been preparing which areas and tools to use for new businesses," and added, "Visible results can be expected next year."

Lastly, CEO Ku emphasized structural changes. Throughout the day, he repeatedly stated from various perspectives, "We have prepared structural changes. You will see them next year."

As a structural change achieved since his inauguration, he cited the joint investment by three rural telecom companies in the 5G network, clarifying that it was led by KT. He said, "KT is leading the biggest structural change in telecommunications history," and added, "Until now, there was only competition, but through cooperation, we have been able to provide benefits to the public."

He also forecasted structural changes in terms of M&A, spin-offs, and listings. He said, "The goal is to pursue an IPO by 2023," introducing specific listing plans for K-Bank, which was incorporated into the group last September. He also predicted, "We will be able to see the picture of spin-offs and others by around next year."

Regarding questions about M&A plans in other fields, he expressed confidence, saying, "I have grown as an M&A expert within the company and know exactly how to handle this area." He reiterated, "This is why I said we have prepared structurally," and confirmed, "You will see several parts next year."

Regarding the recent trend of equity swap-based corporate partnerships, he responded, "We are open to it as well. However, strategically, the 'fit' must be right."

CEO Ku also revealed concerns that KT's corporate value is not properly evaluated in the market. He explained, "The stock price, that is, corporate value, has not been well reflected in the market, which has been my biggest concern since the second half of the year," adding, "But I think this year’s stock market has had some peculiar aspects." He evaluated that expanded market liquidity flowed into the stock market, especially concentrating on growth stocks, causing excessive distortion. He viewed that because of this, companies with traditional businesses like KT, SK Telecom, and banks have not had their corporate values properly reflected.

However, CEO Ku also criticized other companies’ strategies to raise corporate value through subsidiary spin-offs and listings. He said, "It seems like a deception of individual investors, as it would not work in markets other than this year’s," and emphasized, "In that regard, KT will clearly state that we will create a way for investors to trust and invest, where the value we have is properly conveyed and evaluated, even if the stock market does not abnormally attract money like this year."

Meanwhile, at the summit, CEO Ku declared KT’s ambition to lead 'Korea’s Digital Innovation (DX)' through its leap as a digital platform operator. Based on KT’s platform built on AI, Big Data, and Cloud, collectively called 'ABC,' the goal is to drive innovation in other industries within the B2B market. To this end, a new B2B brand, 'KT Enterprise,' was also unveiled. Next month, the 'KT DX Platform,' which links innovative services such as AI, Big Data, and Blockchain, will be launched.

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