April 18, 2024

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[THE INVESTOR] Woongjin Group is set to reacquire majority stake in Coway, a water purifier company that was sold five years ago, according to news reports on Dec. 19. 

“Negotiations are underway with a private equity fund and MBK Partners to acquire their combined 26.8 percent stake in Coway,” the group said in a statement.

Woongjin has selected Samsung Securities and Shin & Kim as financial and legal advisor, repectively, for the deal. Considering that Coway’s share price has hovered around 100,000 won (US$92.45) for the past three months, the total value of the stake is estimated to be around 2 trillion won.

“The resale of Coway was forbidden for five years until Jan. 2, 2018,” said a company official, adding that the company is considering entering the water purifier business. 

Coway, established in 1989 by Chairman Yoon Seok-keum, was the first company to rent and sell water purifiers, bidets and air cleaners while introducing a new rental business model in Korea. With the success of Coway, Woongjin was once a top 30 conglomerate in the nation, but fell into crisis starting with the acquisition of Kukdong E&C in 2007 when the construction sector faced recession. Woongjin’s debt when it entered court receivership in September 2012 reached 1,438.4 billion won. In 2013, Coway was sold to MBK partners for 1.2 trillion won.

By Alex Lee (alexlee@heraldcorp.com)