MBK Partners and the top shareholder of Korea Zinc Co jointly launched a tender offer to buy a controlling stake in the world’s biggest refined zinc producer valuing the company at 13.7 trillion won (US$10.3 billion or RM44.45 billion). 

Shares of Korea Zinc surged as much as 24% - the most on record - after the two disclosed to acquire up to a 14.6% stake in the refined zinc producer. MBK, one of North Asia’s biggest buyout firms, and Young Poong Corp announced their initial plans late on Thursday, saying it was aimed at improving Korea Zinc’s corporate governance and corporate value. 

The proposed deal comes as tensions over management control of Korea Zinc have grown in recent years. Since Choi Ki-ho and Chang Byung-hee co-founded Young Poong more than 70 years ago, the families have built it into a massive conglomerate, holding key shareholdings in businesses such as Korea Zinc.  

When Korea Zinc was founded in 1974, the two families held equal shares in Young Poong. But Chang’s two sons ended up with a bigger share over time as they maintained most of their stake within the family. But Choi family’s stake was divided among his five sons and got diluted over time.

When Choi took over as the chairman of Korea Zinc in 2022, his big and expensive push into battery metals and renewable energy became the flashpoint between the families. Choi has said his new growth strategy was made to ensure sustainability of Korea Zinc, which depends heavily on carbon-intensive smelting business.

“It is neither possible nor appropriate for the third-generation founding family members to continue to co-manage the company when the shares have been fragmented and passed on,” Chang Hyung-chin, the late founder’s son, was cited as saying in the statement.  

However, Korea Zinc opposed MBK’s move. Korea Zinc is led by chairman Choi Yun-beom, the late founder’s grandson. 

“Korea Zinc is against the tender offer by MBK, a predatory corporate raider and speculative capital,” it said in a statement calling the move a “hostile and predatory M&A”, a term referring to mergers and acquisitions. 

  - Bloomberg