SNT Holdings said on the 23rd that it decided to hand over all of its SMEC equity (13.65%) to its affiliate SNT Motiv. SNT Holdings also held a board meeting the same day and decided to transfer all the equity of its wholly owned subsidiary SNT Robotics to SNT Motiv.
SNT Holdings said the transaction is "not a simple equity disposal, but a strategic realignment to integrate the robot, automation, and core components businesses and to acquire Wea Machine Tools." It emphasized its intent to push the business centered on SNT Motiv, which has technology and production capabilities, in response to the rapid reorganization in which the robot parts and factory automation businesses are combining with motor, drivetrain, and electronic control technologies. SNT Motiv has manufacturing capabilities based on motors, drivetrains, and precision machinery.
The transaction to hand over SNT Holdings' SMEC equity to SNT Motiv will be executed through a block trade after hours on Apr. 22. The disclosed disposal unit price (5,130 won) is a projected price calculated based on the closing price on Mar. 20, the day before the preliminary disclosure submission date, and the final disposal unit price will be fixed based on the final market price on the execution date.
SNT Group explained that this equity transfer is also connected to the planned transaction to acquire Wea Machine Tools following the acquisition of SMEC. The company said, "Early and efficient progress on key procedures such as negotiating terms with private equity firm Rilson PE, which acquired the machine tool division from Hyundai WIA, finalizing the acquisition structure, and purchasing equity is the key task for closing the acquisition," adding, "SNT Motiv, which has stable cash generation and capital strength, is the appropriate execution entity to carry this out."
It emphasized that the production base and precision machinery capabilities secured through SMEC and the future completion of the Wea Machine Tools acquisition will function as the core infrastructure of SNT Motiv's robot and automation business.
SNT Group added that if the systems and control technologies of industrial, intelligent, and special operations robots developed and held by SNT Robotics are combined, technical synergies in the robot and automation business linking SMEC–Wea–Robotics are expected to materialize in earnest.
It also appears that a recent mention by the SMEC labor-management council of the possibility of forming a labor union in the event of a change in control influenced this decision. SNT Holdings said, "In the post-merger integration (PMI) process, experience and expertise in responding to labor matters such as union formation and collective bargaining are needed for organizational stability and normalization of management," adding, "SNT Motiv, which has long-accumulated labor management capabilities, will contribute to establishing a stable management system."
Meanwhile, the SMEC equity (5,197,192 shares) held by Choi Pyung-kyu, chairman of SNT Group and a related party of SNT Holdings, was not included in this transaction. Regarding this, the company said, "This equity transfer is a strategic decision within the group in consideration of the successful completion of the SMEC acquisition and subsequent effective PMI, which means there is no change in expectations for business synergy with SMEC."