Jungheung Faces Major Strike Obstacle... Daewoo Construction Acquisition Hits Snag
Jungheung Construction's acquisition of Daewoo Construction has hit a snag. The Daewoo Construction labor union's decision to launch a total strike to block the sale has made disruptions in the acquisition process inevitable.
According to industry sources on the 20th, the Daewoo Construction branch of the National Construction Enterprise Labor Union held a strike vote yesterday for "securing the 2021 wage negotiation and opposing unfair sale," which passed with a 95.9% approval rate. The union stated that this sale bid "ignored the principle of competitive bidding" and declared, "We will file charges for bid obstruction, and strongly proceed with efforts to block due diligence and oppose the acquisition."
The union's strike resolution is expected to disrupt Jungheung Construction's plan to complete the acquisition within the year. According to the union, the major shareholder KDB Investment (KDBI) is currently conducting seller due diligence on Daewoo Construction. To this end, it is known that an M&A task force team has been formed within the Financial Management Headquarters to collect related materials.
If the noise surrounding the sale prolongs, the impact on brand value cannot be ignored. In fact, a recent apartment brand value evaluation conducted by a private company showed a sharp decline in Daewoo Construction's reputation index.
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Jungheung plans to actively communicate with the Daewoo Construction union to make this acquisition a 'win-win.' Jung Chang-sun, chairman of Jungheung Group, said at a press conference held in Gwangju on the 14th, "Once the acquisition is completed, I plan to meet not only with the union but also with executives to convey my sincerity, and once they understand my diligence and honesty, the union will have no reason to oppose." Chairman Jung added, "Daewoo Construction's organization and workforce will remain unchanged and will operate separately as is," emphasizing, "Not a single penny of the money coming into the company will flow out externally."
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