Hanwha S&C sells off 44.6% of IT businessHanwha S&C, the conglomerate’s IT service unit, closed a deal Friday to sell a 44.6 percent stake of its IT business unit, which is planned to spin-off as an affiliate in October.
In a statement, Hanwha S&C said it made an agreement to sell 250 billion won ($218.5 million) worth of shares to a consortium led by Stic Investments. The move is intended to avoid becoming a target of the Fair Trade Commission, which has been working to eradicate internal transactions among conglomerate subsidiaries.
Having started out as an IT service provider for the group, Hanwha S&C has conducted businesses in fields like the Internet of Things, big data management and security. Around 68 percent of Hanwha S&C’s sales last year were generated from work commissioned by other group affiliates. According to Korea’s current Fair Trade Act, conglomerate subsidiaries in which owner family members directly hold over 20 to 30 percent are targets for internal transaction regulations.
Hanwha S&C is currently owned entirely by Hanwha Group Chair Kim Seung-yeon’s three sons. In fact, Hanwha S&C has an important role in the group’s structure chain as it is the stakeholder for multiple affiliates including Hanwha Energy.
Hanwha S&C is planning to spin off IT divisions into one, yet unnamed independent subsidiary in October. According to Friday’s deal, Stic’s consortium will have a 44.6 percent stake in the new company, leaving Hanwha S&C with 55.4 percent. The remaining function of Hanwha S&C will be as the stakeholder in other affiliates.
After the spin-off, the business-conducting unit will no longer be a regulation target for internal transactions because the owner’s family will not directly hold shares in it.
Hanwha S&C added that Stic’s acquisition will enhance its business competitiveness with the management advice of external investors, and that it will continue exploring other ways to further lower major stakeholder Hanwha S&C’s share in the future.
BY SONG KYOUNG-SON [email@example.com]
with the Korea JoongAng Daily
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