Doosan Enerbility Co., a leading South Korean power plant engineering company, is handing over its entire 46% stake in machinery affiliate Doosan Bobcat Inc. to Doosan Robotics Inc., which eventually plans to delist Bobcat after acquiring a 100% stake in the tractor maker.
The move is part of nuclear reactor-to-machinery conglomerate Doosan Group’s governance restructuring to transform into a smart machine business leader.
Doosan Corp., the group’s holding company, said in a regulatory filing on Thursday that all three relevant affiliates held respective board meetings and approved the reorganization plan earlier in the day.
To facilitate the groupwide reorganization, Doosan Enerbility will split into two companies – one ongoing business concern and a new investment firm, which will own the 46% stake in Doosan Bobcat.
After that, the investment firm will transfer the Bobcat stake to Doosan Robotics.
Doosan Bobcat is Doosan Group's cash cow The robotics firm plans to eventually acquire 100% of Doosan Bobcat by purchasing the remaining 54% stake from the market through a tender offer. The group said that once Doosan Robotics fully owns Bobcat through business integration, it will delist Bobcat’s shares from the main Kospi bourse.
When the entire process is done, likely by the end of this year, Doosan Corp.’s stake in Doosan Robotics will be diluted to about 40% from the current 68.2%.
THREE SECTORS TO DRIVE DOOSAN GROUP’S GROWTH
Through the subsidiary restructuring, Doosan Group aims to reshuffle its core businesses into three key sectors: clean energy; smart machines; and semiconductors and advanced materials.
Doosan Robotics' collaborative robots The conglomerate’s clean energy business will be led by Doosan Enerbility and Doosan Fuel Cell Co.
Doosan Enerbility specializes in manufacturing small modular reactors (SMRs), which are designed to produce less than 300 megawatts-electric and are thus regarded as next-generation energy sources given their lower investment costs and fewer carbon emissions than existing large nuclear power plants.
The group’s smart machine business will be led by Doosan Robotics and its wholly owned subsidiary Doosan Bobcat.
A Doosan collaborative robot serves coffee GROUP CASH COW
Doosan Bobcat, which posted 1.39 trillion won ($1 billion) in operating profit last year, is Doosan Group’s cash cow.
Doosan Bobcat manufactures construction equipment such as compact excavators, tractors, forklifts and skid-steer loaders and sells them under the Bobcat brand across the globe.
Doosan Group acquired Bobcat from US-based industrial equipment company Ingersoll Rand for $4.9 billion in 2007 – the conglomerate’s largest overseas acquisition at the time.
The group said the restructuring will create synergy by leveraging Bobcat’s global sales network and Robotics’ advanced robot technology.
SMRs are one of the key technology areas where Doosan Enerbility aims to prosper The two firms’ R&D capabilities will be integrated to focus on artificial intelligence, autonomous driving and collaborative robots, it said.
The group’s chip and advanced materials business will be led by Doosan Tesna Inc., Korea’s top semiconductor wafer testing company.
TO SEEK OVERSEAS M&As
Through the subsidiary reorganization, Doosan Group aims to grow bigger and climb Korea’s corporate ladder.
With Doosan Corp.’s share prices rising 157% this year, the conglomerate’s assets have grown to over 30 trillion won, becoming Korea’s seventh-largest conglomerate in terms of market capitalization.
“Following the internal integration and regrouping, Doosan Robotics and other major group affiliates are expected to seek M&As in overseas markets,” said an investment banking industry official.
Write to Jun-Ho Cha and Woo-Sub Kim at chacha@hankyung.com In-Soo Nam edited this article.
