P&G attempts South Korean takeover

Pulp & Paper, Dec 1997

Procter & Gamble Co. revealed a plan to acquire Seoul-based Ssangyong Paper Co. in what would be the first takeover of a South Korean company by a foreign investor. P&G will pay $69 million to buy a 25% stake in Ssangyong Paper from its parent company, industrial conglomerate Ssangyong Group, which owns 32% of the paper operation. P&G then plans to buy a further 26% of Ssangyong Paper stock on the open market through a tender offer which, if successful, would give it a majority share.The Ssangyong Group said it will sell its remaining 7% of its paper company shares on the open market.

The offer is conditional on P&G being able to secure the additional 26% of the stock, and on South Korean Government approval. According to a report by Bloomberg News, the acquisition would give P&G more than a 50% market share for sanitary paper products, including diapers, and could trigger government antitrust scrutiny. P&G already controls around half the sanitary products market in South Korea, and Ssangyong controls around 20%.