Hyundai won’t acquire kimchi fridge company

Hyundai Green Food, an affiliate of Hyundai Department Store, said yesterday that it withdrew from a 150 billion won ($146 million) deal to acquire kimchi refrigerator maker WiniaMando.

The deal drew attention because it would have seen the manufacturer return to Hyundai Group after it was sold in 1999 to CVC Capital Partners, Europe’s largest private equity firm by capital. Before it was acquired by CVC, WiniaMando was initially owned by Halla Group, which was founded by a brother of Chung Ju-yung, the former chairman of Hyundai.

However, Hyundai Green Food confirmed in a regulatory filing that the two parties failed to reach an agreement within the designated negotiation period. Hyundai Green Food signed a memorandum of understanding to purchase WiniaMando in August.

According to multiple local media reports, the deal fell through because WiniaMando’s labor union made a series of demands that Hyundai could not agree to.

Last month, the union sent a statement to Hyundai Department Store demanding that Hyundai offer 5 percent shares of Hyundai Green Food to the union after the acquisition.

The union also requested that Hyundai pay retirement bonuses for 60 months to people who retire early. It also refused to undergo restructuring suggested by Hyundai.

The union said that changes to WiniaMando’s work force should only be made after consultation, and it demanded that WiniaMando keep its current structure for the next two years.

But Hyundai didn’t directly mention the conflict with the labor union in its official statement.

Hyundai Green Food said in the statement that the growth potential from the acquisition appeared limited because fierce competition and market saturation would stymie expansion.

The company also mentioned “a different corporate culture between the two companies that would hamper the companies from forging an amicable corporate environment in the future.”

Some insiders said that acknowledging the differences in corporate cultures was an indirect indication of its wrangling with the labor union.

“Mentioning marketability is implausible here, because companies are usually done with market research by the time they sign a memorandum of understanding,” said an industry source who requested anonymity. “Instead, saying different culture here is a convoluted way of hinting at the disagreement with WiniaMando’s labor union.”

BY PARK EUN-JEE, KOO HEE-RYUNG[ejpark@joongang.co.kr]