The transaction, according to Eugene, would generate synergies within its logistics arm and Hi-mart.
According to sources, over 10 companies bid for the stake. Although Eugene was not the highest bidder, it succeeded on the basis that it will keep Hi-martÆs management rather than restructure the company, as would have been the case if a larger conglomerate were to own the business. Since the pricing differential was not much lower than some of the bidders (which included Lotte Shopping), some think that a few of the chaebol in the shortlist may have wished they had bid higher.
Goldman Sachs is arranging the transaction.
EugeneÆs line of business includes cement, ready-mixed concrete, construction, digital media and confectionery. The companyÆs total assets amount to W860 billion ($931 million), according to the company website. Total sales stand at W856 billion ($926 million), while ordinary profit has been disclosed at W19 billion ($20 million). This year, the conglomerate has already acquired Seoul Securities, a financial firm that provides brokerage services, and Logen Corporation, which specialises in parcels and express delivery.
Hi-Mart's sales last year increased by 12.5% to W2.15 trillion won, with net profit reaching W87 billion, or a 31% increase, according to the Korea Stock Exchange.
Eugene shares increased by 14.9% yesterday on the back of the news, opening at W12,050 and reaching a high of W13,100 on the Korea Stock Exchange.