Hyundai drops bid to nab Dongbu

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Hyundai drops bid to nab Dongbu

A consortium of Hyundai Department Store and affiliate Hyundai Home Shopping gave up its plan to acquire Dongbu Express, a logistics company, on Friday

“We discussed the price and detailed conditions concerning the acquisition of Dongbu Express,” said the two companies in a joint release, “but differences led us not to proceed with the purchasing plan.”

The consortium refused to disclose details due to confidentiality reasons.

Hyundai Department Store in July submitted a letter of intent for a controlling stake in the logistics company and formed a consortium with Hyundai Home Shopping in September to participate in the deal as the sole bidder.

At the time, Hyundai said it wished to diversify its business by advancing into the logistics industry through the acquisition.

Preliminary bidding for the logistics firm attracted four other companies: CJ Korea Express, Hankook Tire and Dongwon Group.

Private equity funds and Lotte Group are also known to have shown interest.

Dongbu, Korea’s third-largest logistics company, is 100 percent owned by KTB Private Equity.

Although the bid failed this time, Hyundai is expected to proceed with purchasing a logistics company, as it believes doing so will help it up to 90 billion won ($78 million) a year on logistics costs for its retail affiliates, which include Hyundai Livart, Handsome and Hyundai Green Food.

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