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KT&G headquarters located in southern Seoul (KT&G) |
Singapore-based activist fund Flashlight Capital Partners has offered to acquire Korea Ginseng Corp., an affiliate under South Korea's dominant tobacco company KT&G, at the price of nearly 2 trillion won ($1.47 billion). KT&G called it a “unilateral” offer.
Korea Ginseng Corp., under the wings of KT&G, is the company behind the well-recognized red ginseng brand, JungKwanJang.
“The acquisition offer was unilaterally released without any discussion with the company,” a statement issued by KT&G on Monday read. "We will look into the letter of intent sufficiently."
In the announcement, however, KT&G further stressed Korea Ginseng Corp. is a key part of its plan to nurture future growth drivers. It said it will put in all efforts to achieve the goals set under a mid-term business plan released last year.
The plan, announced in January 2023, involves bolstering its investment and sales in three key areas: next-generation tobacco and nicotine products, often referred to as e-cigarettes, overseas businesses related to vapes and health supplement products offered by Korea Ginseng Corp.
The announcement came shortly after Flashlight Capital Partners said Monday it has sent a letter of intent to KT&G, offering to acquire a 100-percent stake in the ginseng manufacturer at 1.9 trillion won.
Since 2022, the activist fund has been pressuring KT&G to spin off its ginseng unit, citing low performance and undervaluation. KT&G's board rejected the proposal, seeing the spinoff to be unnecessary. It also voiced concerns the separation may lead to a loss of synergy for both KT&G and Korea Ginseng Corp.
