NH Nongwoo Bio to Acquire Majority Shareholder’s Seed Business for 36.7 Billion Won

NH Nongwoo Bio will acquire the vegetable seed business of Nonghyup Seed Center from its majority shareholder, Nonghyup Economic Holdings, for 36.7 billion won.

NH Nongwoo Bio disclosed that its board of directors met on the 29th and decided to acquire all of Nonghyup Economic Holdings’ Nonghyup Seed Center business for 36.738 billion won. The acquisition date is Dec. 1.

Last year, the vegetable seed business being acquired had assets of 23.18261 billion won and revenue of 18.6043 billion won. Those figures represented 6.57% and 11.72%, respectively, of the company’s totals.

The company said the purpose of the acquisition was to “become a global leader by strengthening its domestic market position.” Because the business is in a field the company already operates in, it plans to incorporate it into a business division and operate it without establishing a separate legal entity.

The acquisition will be funded with cash on hand and financial borrowings, and payment will be made in cash on the transaction closing date. The transaction is subject to approval by the board, which it received that day, because it qualifies as a large-scale internal transaction under the Fair Trade Act.

Hanul Accounting Corporation applied the discounted cash flow (DCF) method and valued the business division at 34.343 billion to 40.746 billion won. It assessed the agreed-upon planned acquisition price of 36.7 billion won as reasonable.

An extraordinary shareholders’ meeting to approve the business transfer will be held Nov. 6. Approval requires at least two-thirds of the voting rights of shareholders present and at least one-third of the total issued shares, as a special resolution.

The period for dissenting shareholders to exercise their appraisal rights runs from the date of the shareholders’ meeting resolution through Nov. 25. The planned purchase price is 7,332 won, 5% above the statutory calculated value of 6,983 won.