Hoban Construction gave up taking over Daewoo E&C on February 7 in only nine days since Hoban Construction was selected as the preferred bidder of Daewoo E&C.
"Rumors about political connections and preferentialism and some resistance against the sell-off of Daewoo E&C including that of the Daewoo E&C labor union gave us many difficulties over the past three months,” said an official in charge of M&As at Hoban Construction. “However, we pondered over how our company will be able to handle present and risk factors of Daewoo E&C while facing a series of recent problems such as accidental loss of Daewoo E&C’s overseas business that cannot be internally controlled. Finally, we come to a conclusion that we have to put a halt to acquisition work.
On the day before February 8, massive overseas loss was found in the fourth quarter of last year in an annual earnings announcement. This fact played a crucial role in leading Hoban Construction to the conclusion.
Hoban Construction solely participated in the bid based on the builder’s business performances until the third quarter of last year, and was scheduled to conduct due diligence after signing a memorandum of understanding this month.