Two powerful acquirers tender bids for both Hi-Mart, Woongjin Coway


SK Group and Lotte Group are engaging in fierce competition to take over big enterprises in the mergers and acquisitions market.

The groups’ units -- SK Networks and Lotte Shopping -- have submitted letters of intent for the bidding to take over Hi-Mart. They also tendered bids for Woongjin Coway.

The participation of the nation’s third-largest and fifth-largest business groups in the two biddings is drawing wide attention in the market as both have been picked as one of the few powerful acquirers in the local M&A market.

SK and Lotte have expanded their business scale by winning a variety of bidding competitions, respectively.

Hi-Mart, established in 1999, was formerly a sales unit of Daewoo Electronics, which went under court receivership in the wake of the 1997 Asian financial crisis.

Woongjin Coway, the country’s biggest manufacturer of water and air purifiers, is attractive as it was an important cash-cow subsidiary of Woongjin Group. The unit accounts for about 30 percent of the conglomerate’s total sales.

For the two big M&A targets, the rivalry between SK chairman Chey Tae-won and Lotte chairman Shin Dong-bin is a key eye-catching point.

Chey took the initiative in SK Telecom’s acquisition of Hynix Semiconductor last December. Shin also has led in winning a series of big M&A competitions in the financial and logistics sector.

According to a recent survey on finance-specialized executives at 100 major enterprises, Chey and Shin were picked as No. 1 and No. 2, respectively, as “the leader who will carry out his group’s growth via M&As.”

Research analysts shared the view that their management style is similar in terms of decision-making process in a resolute manner.

The two groups’ capacity in fundraising has far surpassed other potential bidders.

SK injected about 3.38 trillion won ($3 billion) for the Hynix acquisition and its unit SK Telecom became the largest shareholder of the world’s second-biggest memory chipmaker.

Chey took the helm of SK Group at the age of 38 in January 1999, following the death of his father Chey Jong-hyun from lung cancer.

Similar to the steps taken by his father, the junior Chey is now eying the export-based semiconductor business, while already devising plans to expand its global projects.

Shin has continued to emphasize efforts to turn the current economic crisis into an opportunity, urging his staff to look for blue-chip companies for M&As.

“This time of economic downturn could be an opportunity. We need to be more active in the M&A of healthy companies put on the market at low prices,” Shin was quoted as saying during his meeting with executives.

Over the past few years, Lotte took over big firms including Doosan Liquor, Woori Home Shopping, GS Department Store, Grand Department Store, Buy The Way and Korea Non-Life Insurance.

By Kim Yon-se (kys@heraldcorp.com)