Dongwon Group Governance Restructuring... Strengthening Kim Nam-jung's New Business Initiatives

Dongwon Group, Merger of Dongwon Enterprise and Dongwon Industries
Simplifying Complex Ownership Structure... Increasing Management Efficiency
New Business Strengthening Expected Led by Vice Chairman Kim Nam-jung
Stock Split from 5,000 KRW to 1,000 KRW per Share to Expand Trading

[Asia Economy Reporter Song Seung-yoon] As Dongwon Group is pushing for the merger of its holding company Dongwon Enterprises and its intermediate holding company Dongwon Industries, the group’s internal control under Vice Chairman Kim Nam-jung is expected to be further strengthened after the merger.

According to industry sources on the 8th, Dongwon Group submitted a preliminary review application for a reverse merger to the Korea Exchange the day before, aiming to merge the listed company Dongwon Industries and the unlisted company Dongwon Enterprises.

After the merger, the existing holding company Dongwon Enterprises will be absorbed into Dongwon Industries, which will become the holding company of Dongwon Group. Subsidiaries of the existing holding company, as well as grandchild companies such as Starkist and Dongwon Loex, will all come under Dongwon Industries and be converted into subsidiaries. Dongwon Group transitioned to a holding company system in 2001 by establishing Dongwon Enterprises. The CEOs are President Lee Myung-woo of Dongwon Industries and Park Moon-seo of Dongwon Enterprises, who serve as co-CEOs for the business and holding divisions, respectively. The largest shareholder of Dongwon Enterprises is Vice Chairman Kim, who holds 68.3% of its shares. After the merger, Vice Chairman Kim will also become the largest shareholder of Dongwon Industries.

Dongwon Group has been evaluated as having a somewhat complex governance structure, with the holding company Dongwon Enterprises controlling five subsidiaries including Dongwon Industries, Dongwon F&B, and Dongwon Systems, while the intermediate holding company Dongwon Industries owns 21 subsidiaries including Starkist and Dongwon Loex. However, with this merger simplifying the governance structure, faster decision-making will be possible, which is expected to increase management efficiency.

Furthermore, Vice Chairman Kim’s push to expand new growth engines such as packaging materials and secondary battery businesses is expected to diversify the profit structure, which has been mainly focused on the food business. In addition to the existing seafood sector, diversification into meat and health functional foods is also anticipated. Vice Chairman Kim joined Dongwon Industries in 1996, working as a production worker at the tuna can manufacturing plant in Changwon and handling sales duties in the Cheongnyangni area of Seoul, making him a rare second-generation owner who has experienced various field operations. The well-known anecdote is that he concealed his status as a second-generation owner while working at the factory. Along with this field experience, he has gone through various divisions within the group, earning high praise for his understanding of the food industry. Since the retirement of Honorary Chairman Kim Jae-chul in 2019, Vice Chairman Kim has led about ten mergers and acquisitions (M&A), marking the full-scale start of second-generation management. As most of these businesses have now reached a stable stage, there is a view that after this ‘reorganization,’ he can aggressively expand business once again.

A Dongwon Group official said, “This merger is aimed at improving management efficiency by simplifying the governance structure, and for now, we plan to continue the upward trend centered on the companies previously acquired,” adding, “Vice Chairman Kim will continue to use his title for the time being.”

Meanwhile, simultaneously with this merger, Dongwon Group plans to conduct a stock split to enhance corporate value in the stock market. Accordingly, the current par value of 5,000 won per common share will be split into 1,000 won, which is expected to increase the volume of shares in circulation.

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