© Reuters. ‘Global apparel OEM’ Se-Ah, embraces Ssangyong E&C
Chairman Kim Woong-gi
Global SeAH Group, which has SeAH Trading as its core subsidiary, will acquire Ssangyong E&C, a construction company with a 45-year history. SeAH Trading, which has grown from its apparel manufacturing and export business, is accelerating its business diversification. If the transaction is successful, Ssangyong E&C will be sold to the Dubai Investment Authority in 2015, and will return to a domestic company 7 years after graduating from legal management.
According to the investment banking (IB) industry on the 2nd, Global SeAH submitted a letter of intent (LOI) to the Dubai Investment Authority and will soon start due diligence on Ssangyong E&C. The two sides plan to negotiate with the goal of a stock purchase agreement (SPA) at the end of July at the earliest. The target of the transaction is a 99.95% stake in Ssangyong E&C held by the Dubai Investment Authority. The amount of the transaction was not disclosed. Global SeAH Group with sales of 10 trillion won in 2025 due to business diversification is based on Se-A Trading, which focuses on textile and apparel manufacturing. SeAH Trading is a company that manufactures an average of 2.5 million pieces of clothing per day at 40 factories in 10 countries around the world, including the US, Indonesia, Vietnam, and Haiti. It manufactures clothing using the original equipment manufacturer (OEM) method and the manufacturer development production (ODM) method and supplies it to global brands such as GAP and Wal-Mart.
Since Global SeAH was launched as a group holding company in 2015, it has been trying to diversify its business through mergers and acquisitions (M&As) large and small. In 2018, it entered the plant and construction business by acquiring the plant division of STX Heavy Industries (currently SeAH STX Entech) for 18 billion won. In 2020, it acquired Taelim Paper and Taelim Packaging, the largest domestic corrugated cardboard and box manufacturers, for 730 billion won.
Global SeAH has been searching for M&A opportunities in traditional industries such as manufacturing and construction. The goal is to achieve 10 trillion won in sales and 1 trillion won in operating profit by 2025 by adding construction, information technology (IT) and investment sectors to the existing mainstay textile and fashion sectors. Global SeAH Group’s consolidated sales last year were 3.58 trillion won. As of the end of last year, cash and cash equivalents stood at 204.6 billion won. Synergy Global SeAH as a global network took over Ssangyong E&C after valuing its 7 trillion-won order balance, global recognition, and construction technology. Ssangyong E&C has traditionally been strong in overseas business. It has become famous as it has succeeded in constructing overseas landmarks such as Marina Bay Sands in Singapore and Emirates Tower Hotel in Dubai.
Global SeAH expects to strengthen its position as a developer in overseas markets by adding Ssangyong E&C’s recognition and capabilities to its global network and investment experience. It is analyzed that various investment methods can be used in infrastructure projects such as power generation, railroads, roads, and urban development projects in Latin American countries where Sae-A commercial has entered.
Synergy with its subsidiary SeAH STX Entech is also expected. SeAH STX Entech has strengths in domestic and overseas oil and gas facilities, power plants, and new and renewable energy design, procurement, and construction (EPC) businesses. It is expected that significant synergies can be created by collaborating with Ssangyong E&C, which has experience in S-Oil Onsan project EPC.
Ssangyong E&C was established as Ssangyong General Construction after independence from the construction division of Ssangyong Cement in 1977. Ssangyong E&C, whose liquidity deteriorated due to the global financial crisis in 2008, entered the rehabilitation process in early 2014. In January 2015, the Dubai Investment Authority took over and graduated from legal management. It is managed by Kim Seok-jun, the second son of the founder of Ssangyong Group, Kim Seong-gon. Even after the acquisition of the management rights, the Dubai Investment Authority has been entrusting the management with high praise for Chairman Kim’s overseas network and ability to win orders.
Ssangyong E&C’s sales last year were 1.40 trillion won, down 3 percent from the previous year. After the Dubai Investment Authority took over, it has been in the black since 2016, but last year saw an operating loss of 110.8 billion won in the aftermath of the Corona pandemic.
Reporter Park Si-eun seeker@hankyung.com
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