[News Space=Reporter seungwon lee] Dongwon Group has embarked on a business restructuring to significantly strengthen its global food business. Dongwon Industries, the holding company, has decided to incorporate its affiliate Dongwon F&B as a 100% subsidiary and group four domestic and foreign food companies into a business group (Division). Through this, the company plans to create synergy by consolidating its scattered food business capabilities and achieve a second leap forward in the global food market.

Dongwon Industries and Dongwon F&B announced on the 14th that they held a board meeting and decided to enter into a comprehensive stock exchange agreement. Accordingly, Dongwon Industries will issue common stocks and pay them to Dongwon F&B shareholders at an exchange rate of 1 (Dongwon Industries) to 0.9150232 (Dongwon F&B). The stock exchange ratio between the two companies was calculated in accordance with the Enforcement Decree of the Capital Market Act. Upon completion of the stock exchange, Dongwon F&B will be incorporated as a 100% subsidiary of Dongwon Industries and delisted.

The two companies plan to hold a shareholders' meeting on June 11 (tentative) to decide on the stock exchange agenda. Shareholders who oppose the stock can exercise their right to purchase shares, and the price for the purchase was determined to be 35,024 won for Dongwon Industries and 32,131 won for Dongwon F&B in accordance with relevant laws. The number of newly issued shares of Dongwon Industries will be finalized after July 1, when the stock purchase request period ends.

This stock exchange was made based on the strategic judgment that Dongwon Industries, together with Dongwon F&B, will proactively enter the global food market to secure a second growth engine and strengthen business competitiveness. The domestic food market is experiencing structural changes such as a decline in economic growth rate, a sluggish domestic demand, and intensifying competition, so global expansion is absolutely necessary.

Dongwon Industries plans to achieve strategic advancement of global business and synergy creation by grouping food-related affiliates such as Dongwon Home Food, Starkist, and SCA SA into the 'Global Food Division' after incorporating Dongwon F&B into a 100% subsidiary. Through this, the overseas sales ratio of the group's food business is expected to increase from 22% in 2024 to 40% by 2030.

Specifically, the company plans to integrate R&D organizations scattered across affiliates into a “global R&D center” to focus on developing new products that can compete in the global market. The company plans to expand its R&D budget, which stands at 0.3% (ratio of R&D expenses to sales) as of 2024, to 1% by 2030, more than tripling.

In addition, we have decided to accelerate the development of sales channels in the North American and Central and South American markets by utilizing the extensive distribution network of our US subsidiary, StarKist. As part of this, we plan to launch a combined product consisting of steady sellers from existing Dongwon F&B and StarKist, while also introducing new products through integrated R&D.

Dongwon F&B also plans to pursue collaboration with Senegal’s SCA SA (Societe de Conserverie en Afrique Sa) and CAPSEN.SA (Compagnie Africaine de Peche au Senegal. Societe Anonyme), tuna catching and canning subsidiaries under Dongwon Industries. This is expected to become a bridgehead for advancing into the Middle East and European markets in the mid to long term.

In the past, it was difficult for Dongwon F&B to carry out large-scale global M&As due to lack of financial resources, but going forward, Dongwon Industries plans to pursue M&As for rapid growth.

Through this stock exchange, Dongwon Group was also able to resolve the 'double listing' (a method of listing the parent company and its subsidiary at the same time). The double listing has led to controversy over the opacity of the management structure and is considered a major cause of the 'Korea Discount' in the Korean stock market.

Dongwon Group is expected to be the first large domestic company to proactively resolve duplicate listings, thereby increasing corporate transparency and contributing to enhancing shareholder value.

Existing Dongwon F&B minority shareholders will be able to benefit from higher dividends as they are incorporated as shareholders of Dongwon Industries, which has relatively high business growth potential. As of 2024, Dongwon F&B's dividend is 800 won per share, while Dongwon Industries' is 1,100 won.

A Dongwon Group official said, “We have pursued a comprehensive stock exchange to spur the growth of our global business through the reorganization of our food affiliates and to eliminate overlapping listing structures,” adding, “We plan to discover a second new growth engine at the group level to enhance corporate value and practice shareholder returns.”