Taekwang’s acquisition of family stake in Aekyung Ind without tag-along right infringes on shareholder rights
Deal has completely excluded minority shareholders; Taekwang should purchase all shares owned by minority shareholders at the same price as controlling family
National Assembly should expedite introduction of a mandatory tender offer system to protect minority shareholders
According to a disclosure on September 12th, Taekwang Ind. has been selected as the final preferred bidder for the acquisition of a controlling family’s stake in Aekyung Industrial. AK Holdings, which owns a 45% stake in Aekyung Industrial, announced that Taekwang's consortium included T2 Private Equity and Yuanta Investment. AK Holdings signed a memorandum of understanding (MOU) for the sale of its 45% stake in Aekyung Industrial with the consortium. The disclosure also noted that details such as the transaction amount and schedule are subject to change. Taekwang Ind. has confirmed the same information in its own public filing.
While some local media have portrayed this as a full corporate takeover, that's not the case, in our opinion. The transaction involves a 63% private stake — comprising AK Holdings’ 45% stake and an 18% stake held by the Jang family's Aekyung Asset Management. The remaining 32% held by minority shareholders, excluding 5% treasury shares, is being completely ignored. In countries with developed markets and better investor protection, such transactions are not called corporate takeovers but rather private benefit transactions for controlling shareholders, and are distinguished from sales of the entire company where control changes hands. However, case law holds that when an acquirer gains control, the board of the company being taken over must at least examine whether the deal poses risks to the company and minority shareholders.
According to media reports, the transaction value for 63% stake is in the mid-W400 billion range. Assuming W450 billion for 63% stake, that equates to W26,917 per share, or a staggering 73% premium over the September 12 closing of W15,520. It’s a pitty that Aekyung Industrial shareholders have suffered large losses over time: the stock has fallen9% over the past year, 26% over five years, and 52% over ten years. To uphold the spirit of the amended Commercial Act, our Forum urges the implementation of the following four actions:
1. The Taekwang Ind. consortium should not grant a premium of over 70% only to Aekyung Group’s related parties, but find a way to grant it equally to minority shareholders. Taekwang Ind. should offer to purchase all shares owned by minority shareholders at the same price as those of Aekyung affiliates. This aligns with the OECD Principles of Corporate Governance emphasizing “Equitable treatment of all shareholders, including minority and foreign shareholders.”
2. The National Assembly should expedite the introduction of a mandatory tender offer system to strengthen shareholder protection. The KOSPI 5000 Special Committee held a seminar on September 18th to discuss amendments to the Capital Markets Act, including the introduction of such a system.
3. Chairwoman Jang Young-shin and her family should, in line with the intent of the amended Commercial Act, refrain from exiting at a high price solely for themselves, and instead protect the rights of long-suffering minority shareholders of Aekyung Industrial.
4. The board of directors at Aekyung Industrial should carefully assess whether this private transaction aligns with the amended Commercial Act’s intent that “the interests of all shareholders must be protected and all shareholders must be treated equally.” Full application of the principle of fairness is necessary. Shareholders and the market will be watching closely, as the board's approach to granting due diligence access — in terms of both method and scope — will be a direct test of its fiduciary duty.
September 23th, 2025
Korean Corporate Governance Forum
Chairman, Namuh Rhee
Taekwang’s acquisition of family stake in Aekyung Ind without tag-along right infringes on shareholder rights
Deal has completely excluded minority shareholders; Taekwang should purchase all shares owned by minority shareholders at the same price as controlling family
National Assembly should expedite introduction of a mandatory tender offer system to protect minority shareholders
According to a disclosure on September 12th, Taekwang Ind. has been selected as the final preferred bidder for the acquisition of a controlling family’s stake in Aekyung Industrial. AK Holdings, which owns a 45% stake in Aekyung Industrial, announced that Taekwang's consortium included T2 Private Equity and Yuanta Investment. AK Holdings signed a memorandum of understanding (MOU) for the sale of its 45% stake in Aekyung Industrial with the consortium. The disclosure also noted that details such as the transaction amount and schedule are subject to change. Taekwang Ind. has confirmed the same information in its own public filing.
While some local media have portrayed this as a full corporate takeover, that's not the case, in our opinion. The transaction involves a 63% private stake — comprising AK Holdings’ 45% stake and an 18% stake held by the Jang family's Aekyung Asset Management. The remaining 32% held by minority shareholders, excluding 5% treasury shares, is being completely ignored. In countries with developed markets and better investor protection, such transactions are not called corporate takeovers but rather private benefit transactions for controlling shareholders, and are distinguished from sales of the entire company where control changes hands. However, case law holds that when an acquirer gains control, the board of the company being taken over must at least examine whether the deal poses risks to the company and minority shareholders.
According to media reports, the transaction value for 63% stake is in the mid-W400 billion range. Assuming W450 billion for 63% stake, that equates to W26,917 per share, or a staggering 73% premium over the September 12 closing of W15,520. It’s a pitty that Aekyung Industrial shareholders have suffered large losses over time: the stock has fallen9% over the past year, 26% over five years, and 52% over ten years. To uphold the spirit of the amended Commercial Act, our Forum urges the implementation of the following four actions:
1. The Taekwang Ind. consortium should not grant a premium of over 70% only to Aekyung Group’s related parties, but find a way to grant it equally to minority shareholders. Taekwang Ind. should offer to purchase all shares owned by minority shareholders at the same price as those of Aekyung affiliates. This aligns with the OECD Principles of Corporate Governance emphasizing “Equitable treatment of all shareholders, including minority and foreign shareholders.”
2. The National Assembly should expedite the introduction of a mandatory tender offer system to strengthen shareholder protection. The KOSPI 5000 Special Committee held a seminar on September 18th to discuss amendments to the Capital Markets Act, including the introduction of such a system.
3. Chairwoman Jang Young-shin and her family should, in line with the intent of the amended Commercial Act, refrain from exiting at a high price solely for themselves, and instead protect the rights of long-suffering minority shareholders of Aekyung Industrial.
4. The board of directors at Aekyung Industrial should carefully assess whether this private transaction aligns with the amended Commercial Act’s intent that “the interests of all shareholders must be protected and all shareholders must be treated equally.” Full application of the principle of fairness is necessary. Shareholders and the market will be watching closely, as the board's approach to granting due diligence access — in terms of both method and scope — will be a direct test of its fiduciary duty.
September 23th, 2025
Korean Corporate Governance Forum
Chairman, Namuh Rhee