XM levert geen diensten aan inwoners van de Verenigde Staten.

Family feud over Korea's zinc giant threatens to affect supply chain



<html xmlns="http://www.w3.org/1999/xhtml"><head><title>EXPLAINER-Family feud over Korea's zinc giant threatens to affect supply chain</title></head><body>

By Joyce Lee and Hyunjoo Jin

SEOUL, Oct 4 (Reuters) -Korea Zinc 010130.KS, the world's biggest refined zinc producer, has been embroiled in a bitter feud among founding families over control of its $12 billion zinc empire.

The winner of the battle stands to control South Korea's significant player in a U.S.-led effort to reduce heavy reliance on China for key metals and materials used in industries ranging from construction to automobiles, analysts said.

Private equity firm MBK Partners and Young Poong 000670.KS on Friday raised their offer price for shares in Korea Zinc to match a counteroffer from rival family members and Bain Capital.

WHO ARE THE MAJOR PLAYERS?

Young Poong was founded in 1949 as a trading company by two co-founders surnamed Chang and Choi born in what is now North Korea. The company expanded into smelting metals in the 1970s, and then in 1974 the two families formed Korea Zinc, with the Choi family managing the operation.

Scions of the two families are now joining forces with private equity firms in a takeover battle. The co-founding Chang family, which leads zinc producer peer Young Poong, joined forces with private equity MBK Partners for a $1.7 billion tender offer in September.

The Choi family teamed up with Bain Capital to fend off that takeover attempt.

Korea Zinc's largest shareholder is currently Young Poong, which runs a 400,000 metric ton-per-year zinc smelter at Seokpo, South Korea, which is the world's sixth largest.

Young Poong, also known for its bookstore chains in Korea, generates a majority of its revenue from sales of parts for smartphones and other electronic devices.

MBK Partners, a North Asia-focused private equity firm with investments in South Korea, Japan and China, has over $30 billion in capital under management, according to its website.

Founded by Michael ByungJu Kim in 2005, MBK has been a frequent player in South Korean deals, including the purchase of local hypermarket chain Homeplus from Tesco TSCO.L for $6.1 billion in 2015.

MBK Partners said in September it plans to eventually become the largest shareholder in Korea Zinc, partly by exercising a call option to buy Korea Zinc shares owned by Young Poong and associated entities.

WHAT ARE THE STAKES?

Korea Zinc and top shareholder Young Poong supply 85% or more of South Korea's zinc, mostly to protect steel used in cars, construction and other products.

Although Korea Zinc has the biggest market share among companies in refined zinc, China dominates the global production of refined zinc, considered a critical metal by Washington.

Korea Zinc has in recent years attracted partnerships from LG Chem 051910.KS and Hyundai Motor 005380.KS to produce battery materials in Korea, in response to Washington's call to reduce reliance on China for batteries and battery materials.

Korea Zinc also supplies materials for semiconductor firms such as sulphuric acid for Samsung Electronics 005930.KS.


WHAT SPARKED THE TAKEOVER BATTLE?

After decades of intertwined business operations, in the late 2010s Young Poong raised its ownership in Korea Zinc as part of a governance structure reorganisation to resolve circular shareholding, enlarging the stake controlled by the Chang family versus the Choi family.

When a third-generation member of the Choi family, Yun B. Choi, began to lead Korea Zinc's management in 2019, he began to expand the company's business.

Choi, a Columbia law school graduate, expanded investments beyond the core zinc business to battery materials, hydrogen and renewable energy, inviting criticism from Young Poong.

The conflict between visions for the company rose to the surface when Korea Zinc said this year it would no longer handle the treatment of sulphuric acid generated at Young Poong's Seokpo smelter.

Korea Zinc has said the costly transport and storage of the dangerous by-product from the Seokpo smelter should be Young Poong's responsibility handled with Young Poong's investment. Young Poong said Korea Zinc had violated a long-standing agreement and threatened Seokpo smelter's viability.


CONTRASTING FORTUNES

Korea Zinc is a key investment for loss-making Young Poong.

Although both Korea Zinc and Young Poong are both in the smelting business in South Korea, coping with higher electricity costs and tougher regulations, Korea Zinc has reported profits for the past straight 98 quarters.

Young Poong's CEO has also been arrested and charged this year over safety-related deaths at the company's Seokpo smelter, and is engaged in a lawsuit to nullify a South Korean authorities' environmental pollution ruling that may force the Seokpo smelter to close for two months.


($1 = 1,333.6000 won)



Reporting by Joyce Lee, Hyunjoo Jin, Additional reporting by Heekyong Yang; Editing by Tom Hogue

</body></html>

Disclaimer: De entiteiten van de XM Group bieden diensten en toegang tot ons online handelsplatform op basis van uitsluitend-uitvoering, waardoor een persoon de beschikbare content op of via de website kan bekijken en/of gebruiken, zonder dat dit is bedoeld voor wijziging of uitbreiding. Dergelijk(e) toegang en gebruik vallen onder: (i) de algemene voorwaarden; (ii) risicowaarschuwingen; en de (iii) volledige disclaimer. Dergelijke content wordt daarom alleen aangeboden als algemene informatie. Wees u er daarnaast vooral van bewust dat de inhoud op ons online handelsplatform geen verzoek of aanbieding omvat om transacties op de financiële markten uit te voeren. Het beleggen op welke financiële markt dan ook vormt een aanzienlijk risico voor uw vermogen.

Alle materialen die op ons online handelsplatform worden gepubliceerd zijn bedoeld voor educatieve/informatieve doeleinden en omvatten geen – en moeten niet worden beschouwd als het bevatten van – financieel, vermogensbelastings- of handelsadvies en aanbevelingen, of een overzicht van onze handelsprijzen, of een aanbod of aanvraag van een transactie in financiële instrumenten of ongevraagde financiële promoties voor u.

Alle content van derden, alsmede content die is voorbereid door XM, zoals opinies, nieuws, onderzoeken, analyses, prijzen en andere informatie of koppelingen naar externe websites op deze website worden aangeboden op een 'zoals-ze-zijn'-basis, als algemene marktcommentaren, en vormen geen beleggingsadvies. Voor zover dat content wordt beschouwd als beleggingsonderzoek, moet u zich ervan bewust zijn en accepteren dat de content niet bedoeld was en niet is voorbereid in overeenstemming met de wettelijke vereisten die zijn opgesteld om de onafhankelijkheid van beleggingsonderzoek te bevorderen en als zodanig onder de geldende wetgeving en richtlijnen moet worden beschouwd als marketingcommunicatie. Zorg ervoor dat u onze Mededeling over niet-onafhankelijk beleggingsonderzoek en risicowaarschuwing in verband met de voorgaande informatie doorneemt en begrijpt; die kunt u hier lezen.

Risicowaarschuwing: Uw vermogen loopt risico. Hefboomproducten zijn mogelijk niet voor iedereen geschikt. Lees onze informatie over risico's.