One of South Korea’s big economic players Dongwon Group specialized in processed food-making is going to take over the country’s third largest logistics player Dongbu Express to diversify their businesses and make synergy effects with its existing fishing, food and packing material businesses.

 As of 20th Sep 2016, Dongwon Enterprise Co., a holding company of Dongwon Group, signed a MOU for the takeover with the full stake from a consortium led by KTB Private Equity and Q Capital Partners. At present the due diligence review is being carried out. The 100 percent stake of the company is expected to cost the company about $421 million.

 “We got the exclusive negotiation right and now we are discussing details for acquisition,” said one of the staff in Dongwon Group.

 If Donwon Group took over Dongbu Express, full scale logistics arm would be added to the food conglomerate whose mainstay is in marine, food and packing business. The group started its logistics unit Dongwon Industries Co. in 1996 for small-scale distribution business.

 Dongwon Group has been showing interest in Dongbu Express since it was put on the market early last year.

 “The expansion of logistics business will generate significant synergy effects with the existing fishing, food and packing material businesses.” said Dongwon Group.

 Dongbu Express is a logistics service provider on land and sea, passenger transportation and car rental area. The company reported $40.3 million of operating profit and $652 million of sales last year.

 In 2014 KTB PE consortium raised fund of $281 million and acquired Dongbu Express from Dongbu Group. It put up the logistics company for sale in the following year after the parent company Dongbu Corp. was under legal management. The first attempt to sell the company to Hyundai Department Store Group failed due to price difference. After that, individual negotiation with Dongwon Group was carried out instead of open tender and finally agreed to be sold to Dongwon Group.