This article was published on May 9, 2025, at 4:29 p.m. on the ChosunBiz MoneyMove site.
As part of restructuring efforts, the sale process of Aekyung Industrial, led by Aekyung Group, has intensified, with domestic private equity fund operators and strategic investors beginning their assessment procedures. Amid a recent slowdown in multi-trillion won mergers and acquisitions, offers in the hundreds of billions of won are emerging, prompting especially mid-sized private equity firms to act actively.
According to the investment banking industry on the 9th, Aekyung Group is distributing teaser letters containing an overview of the sale to potential acquirers of Aekyung Industrial. Preliminary bidding is expected as early as next month. The sellers plan to shortlist candidates who submitted letters of intent (LOI) and select a preferred bidder through a main bid in July. The sale target is the management rights equity of Aekyung Industrial, amounting to 63.38%, held by AK Holdings and Aekyung Asset Management.
Some mid-sized operators reportedly began proactive measures before the sale kicked off, inquiring about the distribution timing of teaser letters from the sale's lead manager, Samjeong KPMG. An investment banking industry official noted, "The news of the Aekyung Industrial sale spread more quickly than expected, prompting preparations and data collection even before the teaser letter distribution."
In contrast to other multi-trillion won assets that have been on the market since the end of last year but remain unsold, Aekyung Industrial is being evaluated as a relatively "manageable" asset. The expected valuation of Aekyung Industrial is around 600 billion won, which is regarded as excessively high compared to its current market capitalization of 370 billion won.
However, industry insiders predict that Aekyung Industrial's final sale price may be adjusted downward due to a significant drop in its first-quarter performance this year. Aekyung Industrial's first-quarter consolidated revenues and operating profit were 151.1 billion won and 6 billion won, respectively, representing declines of 10.7% and 63.3% compared to the same period last year. Operating profit in the cosmetics sector fell by 88.4%, while the household goods sector saw a 26% decrease. Aekyung Industrial is well-known for its household goods brands "Kerasys" and "2080," as well as the cosmetics brand "Luna."
Initially, the market expected that the bidding for Aekyung Industrial would be led by large private equity firms, but contrary to expectations, interest is being shown by small and mid-sized houses and strategic investors. There is also potential for collaborations between financial investors and strategic investors. Some houses without blind funds or those that have mostly exhausted their dry powder are reportedly trying to engage with corporations that hope to enter the cosmetics and household goods sectors or expand their business areas through bolt-ons.
Some analysts point out that Aekyung Industrial's dependency on the Chinese market in the cosmetics sector diminishes its attractiveness. Aekyung Industrial's sales from China last year amounted to 164.2 billion won, accounting for 24% of the total. Seventy percent of the revenue from the cosmetics sector is generated from exports, with 80% of that focused on China. Although efforts are being made to diversify exports to the U.S., Japan, and Southeast Asia, evaluations suggest this is still insufficient.
One official from a mid-sized private equity firm remarked, "Aekyung Industrial is dubbed 'Small LG H&H' in reference to LG H&H, which has been bogged down by its dependency on China for several years," adding, "As it lacks competitiveness in regions like North America and Europe, where beauty brands are generating revenue, there is hesitation about participation in the acquisition bidding."