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| Global Sae-A Group Chairman Kim Woong-ki / Courtesy of Global Sae-A Group |
Apparel maker's aggressive acquisitions seen as preparations for family succession
By Park Jae-hyuk
Global Sae-A Group, the holding company of Sae-A Trading, an OEM clothing manufacturer, has raised concerns about its latest bid to buy Ssangyong E&C from the Investment Corporation of Dubai (ICD), a move that was made public, Thursday, according to industry analysts.
Ssangyong E&C is a Korean builder known for constructing the Marina Bay Sands in Singapore.
After Ssangyong Group disbanded during the Asian financial crisis, Ssangyong E&C was acquired in 2002 by the Korea Asset Management Corp. (KAMCO). After 13 years, KAMCO sold the firm to the Dubaian sovereign wealth fund in 2015.
If Global Sae-A succeeds in acquiring Ssangyong E&C, the apparel group will be able to reinforce its construction business, which it has been fostering since 2018 when it acquired Sae-A STX Entech, formerly the plant construction unit of STX Heavy Industries.
"Global Sae-A decided to acquire Ssangyong E&C, because ICD began reorganizing its investment portfolio after the start of the COVID-19 pandemic," a Ssangyong E&C official said. "Global Sae-A expects to create a synergy effect, utilizing Ssangyong E&C's global awareness and experiences."
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| Ssangyong E&C headquarters in Seoul / Courtesy of Ssangyong E&C |
The group's latest attempt, however, has been interpreted as part of efforts to diversify its business portfolio, preceding a three-way split to pass down the 70-year-old founder Kim Woong-ki's assets to his three daughters, all of whom are in their 30s.
"Medium-sized enterprises rich in cash have tended to pursue acquisition deals, if they have old founders with more than two children," a local M&A expert said.
Global Sae-A Group has been aggressive in recent years in signing major acquisition deals.
After the acquisition of apparel retailer In The F in 2006, the group bought Sae-A STX Entech in 2018, Tailim Paper and its subsidiary Tailim Packaging in 2019 and Valmax specializing in eco-friendly energy this year.
It also participated in bids to acquire Doosan Machine Tools and Taihan Cable & Solution last year.
Before the group scrapped its plan to list Tailim Paper on the benchmark KOSPI market last month, industry officials considered the plan to be partially intended for the founder's daughters to secure cash to pay inheritance taxes.
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