No Work, No Inheritance for the Eldest... 30 Billion KRW in Shares Gifted to Second Daughter on Long-term Leave [Heirs]

<3>Amorepacific’s Third-Generation Succession

Chairman Suh Kyungbae Continues Share Transfers to Second Daughter

Sisters’ 0.5% Point Gap... Shifting Succession Dynamics

Seo Kyung-bae, Chairman of Amorepacific, has gifted shares worth 30 billion won to his second daughter, Hojung Suh, signaling a shift in the succession structure. With the eldest daughter, Minjung Suh, stepping back from the management frontline by taking an extended leave, the concentration of share succession toward the second daughter has intensified the competition between the sisters over who will become the next leader of Korea’s top cosmetics company.

From the left, Minjung Suh, the eldest daughter of Amorepacific, and Hojung Suh, the second daughter. Amorepacific

According to the Financial Supervisory Service's electronic disclosure system on April 26, Chairman Seo Kyung-bae gifted 190,000 common shares to his second daughter, Hojung Suh, on March 27. This amounts to 0.27% of the total issued shares of Amorepacific, with a market value of approximately 30 billion won. As a result of this transaction, Chairman Seo's stake in Amorepacific has fallen from 9.02% (6,228,072 shares) to 8.74% (6,038,072 shares), a decrease of 0.28 percentage points. However, there is no change in the governance structure of the Amorepacific Group.

For Inheritance Tax Payment vs. Move to Secure Control

The company explained that this latest gift was made to help Hojung Suh secure funds to pay gift taxes in installments after receiving shares of the holding company, Amorepacific Holdings, from Chairman Seo. Previously, in February 2021, Chairman Seo gifted 100,000 common shares of Amorepacific Holdings to Hojung, followed in May 2023 by an additional 672,000 common shares and 1,728,000 preferred shares.

Industry insiders interpret the latest share transfer as not only a means to raise funds for paying taxes, but also as a strategic move to strengthen Hojung Suh’s control over the group. By liquidating common shares to ease tax burdens and potentially converting preferred shares to common shares in the future, her influence within the group could be further expanded.

In fact, from February 9 to 20 this year, Hojung Suh sold 7,880 shares of Amorepacific and 256,795 shares of Amorepacific Holdings on the open market. The Amorepacific shares she sold were worth about 1.2 billion won, and the Amorepacific Holdings shares about 8.9 billion won, totaling roughly 10.1 billion won.

The shares Hojung Suh sold were voting common shares, while she retains 1,728,000 preferred shares that are scheduled to be converted into common shares in 2029. These preferred shares represent a 12.77% stake in the holding company. Although these preferred shares have no voting rights and are valued lower than common shares—resulting in a lower gift tax burden—they could significantly impact the ownership structure when converted in the future. Currently, her influence may be limited, but this method allows for a potential increase in group control in the long term.

Rise of the 'Second Daughter Variable' as She Expands Her Role Amid the Eldest Daughter’s Absence

The eldest daughter, Minjung Suh, had long been considered the primary successor to the Amorepacific Group.

In 2012, she received 141,791 shares of Etude (representing a 19.5% stake), 39,788 shares of Espoir (19.5%), and 44,450 shares of Innisfree (18.18%) from Chairman Seo. At the time, the prevailing view in the market was that these gifts were part of a broader succession plan.

However, in September 2022, Minjung Suh sold her entire stakes in Etude and Espoir. Those shares were subsequently canceled through a capital reduction process. In June 2023, she donated 23,222 shares (9.5% stake) of Innisfree, which she still held, to the Seo Kyung-bae Science Foundation, effectively relinquishing about half of the shares she had received.

Born in 1991, Minjung Suh graduated from Cornell University with a degree in Economics and began her career at global consulting firm Bain & Company. In January 2017, she joined the SCM SC Manufacturing Technology team at Amorepacific’s Osan factory as an entry-level employee. After working for six months, she left the company and completed an MBA at the Cheung Kong Graduate School of Business in China. In 2019, she rejoined Amorepacific as part of the Beauty Sales Strategy Team. However, following a divorce in 2021 and rumors of friction with her father, Chairman Seo, she went on extended leave in July 2023 and has remained on leave since then.

The second daughter, Hojung Suh (born in 1995), graduated from Cornell University’s School of Hotel Administration in 2018 before joining O’Sulloc. In July last year, she joined the Product Development (PD) team at Amorepacific Group’s subsidiary O’Sulloc as a new employee, where she has been responsible for product development and marketing work.

The strong performance of O’Sulloc, considered a new growth engine for the group, is further bolstering the succession scenario centered on the second daughter. O’Sulloc recorded annual sales of 110.8 billion won last year, surpassing the 100 billion won mark for the first time since its spin-off. Operating profit has also nearly tripled, rising from 3.2 billion won in 2021 to 9.2 billion won in 2024, and reaching 11.5 billion won last year—breaking the 10 billion won threshold for the first time. Recently, O’Sulloc has also expanded its presence into the wellness sector by operating a tea bar at CJ Olive Young’s wellness platform, ‘Olive Better’.

In his address for the company’s 80th anniversary last year, Chairman Seo outlined a vision to foster new growth drivers such as O’Sulloc, inner beauty, and beauty devices, and to transform Amorepacific into a global beauty and wellness company with annual sales of 15 trillion won within the next decade.

The Founder Also Chose the 'Second Son' for Succession

Amorepacific traces its roots to Yoon Dok-jeong, mother of the late founder Suh Sung-whan, who started the business by making and selling hair oil at a market in Kaesong. Suh Sung-whan later established ‘Taepyeongyang Chemical’ as a foundation, which eventually grew into today’s Amorepacific Group.

During this process, the succession plan diverged from the traditional “firstborn son” approach. Chairman Seo Kyung-bae, the second son, was recognized for his management abilities and took over the cosmetics business, nurturing it into a global beauty company—a classic example of merit-based succession.

This precedent may also influence the current succession process. Rather than a “firstborn daughter first” approach, a competitive structure has emerged, drawing attention to the future direction of succession. Currently, the combined stakes (common and preferred shares) of the eldest daughter Minjung and the second daughter Hojung stand at 2.84% and 2.28%, respectively—a difference of only 0.56 percentage points. Given the potential conversion of Hojung’s preferred shares to common shares, the gap in ownership between the two sisters is extremely narrow. Ultimately, Seo Kyung-bae’s 45,251,829 shares of Amorepacific Holdings (a 50.28% stake) are likely to be the decisive factor in determining the future succession structure.

This content was produced with the assistance of AI translation services.