South Korea: Hite Brewery Co. South Korea's largest beer maker, will likely sign a memorandum of understanding (MOU) next week for the takeover of Jinro Co., the country's largest maker of the distilled liquor "soju," industry sources said on April 8, according to Asia Pulse. Hite, picked as the preferred bidder for the soju maker last week, is expected to deposit 70 billion won (US$69 million) as a guarantee for the takeover deal later in the day, they said.
After the signing of the MOU, a Hite-led consortium will launch due diligence on Jinro, which has a 55 percent market share. At the same time, the consortium is required to get approval from the country's corporate watchdog, Fair Trade Commission (FTC), for the takeover deal.
Earlier this week, FTC Chairman Kang Chul-kyu said his agency will examine whether the acquisition of Jinro by Hite breaches competition rules. Hite commands 58 percent of the South Korean beer market.
If things go smoothly, the consortium, which bid 3.1 trillion won (US$3.05 billion) for Jinro last week, the highest-ever price for a domestic company up for sale, will conclude a formal contract by July. ADVERTISEMENT
Jinro has been under court receivership since May 2003, but its business performance remains strong. It posted operating profit of 221.9 billion won on sales of 734.7 billion won last year.
Hite is set to strengthen its market position if it succeeds in acquiring Jinro. Hite Chairman Park Moon-deuk and his allies hold the largest stake in the beer maker, 45 percent, while Carlsberg of Denmark holds 13 percent.
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