Rising to No. 3 Builder in Korea
Jungheung Group, a business group built around second-tier construction companies, has taken over Daewoo Engineering & Construction (Daewoo E&C), the 5th-largest builder in Korea.
Jungheung Group announced on Dec. 9 that it has signed a stock purchase agreement (SPA) with KDB Investment to acquire its 50.75 percent stake in Daewoo E&C. It signed the main contract for the takeover of Daewoo E&C five months after being selected as the preferred bidder in July 2021.
Jungheung initially offered about 2.3 trillion won as its acquisition price at the time of the tender, but lowered it to 2.1 trillion won in a re-tender, which it requested after knowing that its bidding price was more than 500 billion won higher than those of other bidders. As a result, Korea Development Bank came under fire for accepting the request for a re-tender and allowing Jungheung to cut its bidding price. Critics said the bank committed a breach of trust.
By acquiring Daewoo E&C, Jungheung has become one of the top four builders in Korea. The group has Jungheung Construction and Jungheung Engineering and Construction as its affiliates. The two firms placed 17th and 40th, respectively, in the construction capacity evaluation rankings.