Daewoo Construction Acquisition Faces Severe Final Hurdles... Union and Jungheung Remain at an Impasse for Three Days

Daewoo E&C union members are blocking the entrance in front of the acquisition team office on the 7th floor of the East Building of Daewoo E&C headquarters in Euljiro, Jung-gu, Seoul, on the 17th.

The final stages of Jungheung Group's acquisition of Daewoo Engineering & Construction are facing difficulties due to union opposition.

According to the construction industry on the 19th, the Daewoo Engineering & Construction union's protest to block the Jungheung Group acquisition team from going to work has continued for three days. The Daewoo Engineering & Construction branch of the National Construction Enterprise Labor Union occupied the office in front of the Jungheung Group acquisition team’s office set up at Daewoo Engineering & Construction headquarters on the 17th and blocked access. The acquisition team gave up going to work and set up a temporary office in an affiliate building in Yongsan-gu to continue acquisition tasks.

The union has formed a working-level consultative body since October last year and has held trilateral meetings with Daewoo Engineering & Construction and Jungheung Group. Jung Chang-sun, chairman of Jungheung Group, continued negotiations promising independent management and job security, but conflict arose when the union demanded a written agreement. The union requested that the written agreement include ▲internal promotion of the CEO for independent management ▲limits on the number of executive officers appointed outside affiliated companies ▲prohibition of resale after acquisition ▲prohibition of division and sale of headquarters ▲prohibition of asset sales. Jungheung Group stated, "The acquisition process is still ongoing, and the current largest shareholder is KDB Investment," and said they do not yet have the legal authority to draft a written agreement.

In response, the union strongly opposed, saying, "It means there was never an intention to implement the contents of the written agreement." They argue it is a matter of will, not legal authority. The union plans to continue not only blocking the acquisition team from going to work but also efforts to prevent the acquisition.

Jungheung Group was selected as the preferred bidder for Daewoo Engineering & Construction acquisition in July last year. In December, they signed a stock purchase agreement (SPA) to acquire 50.75% of Daewoo Engineering & Construction shares with KDB Investment, then applied for a corporate merger review with the Fair Trade Commission and are currently conducting the final acquisition process. An industry insider said, "Neither the union nor management is refusing dialogue or negotiation itself, so the acquisition is unlikely to fall through," but added, "It seems that chemical integration between organizations after the acquisition will not be easy."

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