Buying His Brothers' Stakes Too... Kim Dongseon Expands Tender Offer to KRW 210 Billion

Kim Dongkwan to tender 8%; Kim Dongwon, 4%

Offer size increased to ensure ordinary shareholders can sell

Stake to rise to 36.81%, making him largest shareholder if all shares are purchased

Kim Dongseon, the third son of Hanwha Group Chairman Kim Seungyeon and President and Head of Future Strategy at Hanwha Machinery & Service Holdings (Hanwha M&S), is increasing the size of his tender offer for the company’s shares from KRW 128.5 billion to KRW 209.6 billion. He has expanded the number of shares to be purchased to secure an opportunity for ordinary shareholders to sell their shares after his older brothers, Hanwha Group Vice Chairman Kim Dongkwan and Hanwha Life Vice Chairman Kim Dongwon, decided to tender part of their holdings. The move is also expected to strengthen President Kim Dongseon’s foundation for independent management through a reorganization of shareholdings among the brothers.

Hanwha M&S announced on the 22nd that Kim Dongseon had filed an amended tender offer report to increase the number of common shares sought from 16.06 million to 26.203 million. The planned purchase volume will rise from about 19% to 31% of all common shares. The offer price is KRW 8,000 per share, and the tender offer period runs from October 12 to November 2. President Kim will use his personal funds for the tender offer.

Kim Dongseon, president in charge of future strategy at Hanwha M&S. Provided by Hanwha M&S.

The expansion of the tender offer follows the two brothers’ intention to tender shares. Vice Chairman Kim plans to tender 6.762 million shares (8%), while Vice Chairman Kim plans to tender 3.381 million shares (4%). Their planned tenders total 10.143 million shares, equivalent to 63.2% of the original tender offer volume.

If the number of shares tendered exceeds the planned purchase volume, the shares accepted from each shareholder may be allocated on a pro rata basis, reducing the number of shares ordinary shareholders can sell. In light of this, President Kim increased the offer size by the number of shares his two brothers plan to tender.

A Hanwha M&S official said, "Concerns were raised that ordinary minority shareholders who wanted to participate in the tender offer could have their participation rights infringed upon, so President Kim significantly increased the number of shares to be purchased. This was a decision made to uphold the purpose of the tender offer: giving all shareholders the opportunity to sell their shares on the same terms."

The two brothers are not selling all of their holdings. Vice Chairman Kim Dongkwan currently owns 10.55%, while Vice Chairman Kim Dongwon owns 5.81%. If all the shares they plan to tender are purchased, their respective stakes will fall to 2.55% and 1.81%. If President Kim acquires all of the shares planned for purchase in the tender offer, his stake will rise from 5.81% to 36.81%. He would overtake current largest shareholder Hanwha Energy, which owns 23.94%, to become the largest shareholder. However, the actual changes in shareholdings may vary depending on the tender and allocation results.

Business circles see the tender offer as a step toward establishing President Kim’s foundation for independent management by reorganizing shareholdings among the brothers. The two older brothers’ stakes in the Tech and Life divisions will decline, while President Kim’s control will increase. Some interpret the move as groundwork for eventual independent management, even if it does not immediately lead to a separation of affiliates.

Last month, President Kim announced the tender offer plan on October 12, reflecting shareholder concerns about the falling share price and the company’s future growth prospects raised at the shareholders’ meeting. The offer price of KRW 8,000 is about 32% higher than the closing price of KRW 6,080 on October 8, the last trading day before the announcement. Hanwha M&S closed at KRW 7,440 on October 21, up 22.4% from the close immediately before the tender offer announcement.

Hanwha M&S is the holding company for Hanwha Group’s Tech and Life divisions. It was launched through a physical division in August and listed on the Korea Exchange’s main board. Its Tech affiliates include Hanwha Vision, Hanwha Semitech, Hanwha Momentum and Hanwha Robotics, while its Life affiliates include Hanwha Galleria, Hanwha Hotels & Resorts and Ourhome.

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