Jungheung Construction to take over Daewoo EC

By Kim Jae-heun Jungheung Group agreed with Daewoo EC to acquire a controlling stake in the latter, the company said Thursday. In a ceremony, Jungheung signed a stock purchase agreement (SPA) with Daewoo EC to take over 50.75 percent of the latter's shares. The SPA came five months after Jungheung was chosen as the preferred bidder, in July. The construction firm offered to pay 2.1 trillion won ($1.78 billion) and the price is said to have been agreed to. Jungheung will also apply for a review of the merger with the Fair Trade Commission (FTC) this month as the joining of the two entities may help them see increased market share. Combining the construction capacity values of three firms equates to 11.91 trillion won, which will place Jungheung Group in third place, surpassing GS EC (9.92 trillion won) and POSCO EC (9.51 trillion won), which currently rank third and fourth, respectively. Once the review is done, the management rights of Daewoo EC will be completely handed over to Jungheung from Korea Development Bank Investment, which took ownership of the firm from Kumho Asiana Group in 2010. Jungheung vowed to pursue the "fair treatment" of the executives and employees at Daewoo EC, while guaranteeing improvement of the company's debt ratio. These efforts are to dispel the concern among Daewoo EC employees that their company's competitiveness will decrease with the smaller firm of Jungheung acquiring them. Jungheung's priority goal is to beef up Daewoo EC's overseas business while reducing its debt ratio from 284 percent to 105 percent, said the company. Jungheung Group Chairman Jung Chang-sun said in its message to Daewoo EC staff that he will put all the firm's capabilities into creating the world's top construction group, which will not be shaken by any challenges or effects from the external environment.