Kolon Industries said on the 24th it will merge its subsidiary Kolon ENP to build a product portfolio centered on high-value specialty (high-quality) products and improve operational efficiency.
Kolon Industries held a board meeting that day and approved a merger with its subsidiary Kolon ENP. Founded in 1996, Kolon ENP is a high-performance engineering plastics materials company that supplies high-value products such as polyoxymethylene (POM), compounds, and composite materials to advanced industries including automobiles and medical. Kolon ENP produces products at two plants in Gimcheon and exports to China and Europe as well as the domestic market.
The merger will comprehensively succeed to Kolon ENP's assets and liabilities and allocate new shares of the surviving company, Kolon Industries, to the existing shareholders of Kolon ENP. The allocation ratio is 0.1919531 share of Kolon Industries per 1 share of Kolon ENP, and a total of 2,431,26 new shares are scheduled to be issued. Kolon Industries, the largest shareholder with 66.68% equity in Kolon ENP, is targeting completion of the merger in Apr. 2026.
When the merger is completed, Kolon Industries' materials and parts portfolio and sales network are expected to be strengthened. In January, Kolon Industries built an automotive materials and parts lineup ranging from airbags and car seats to interior materials through a merger with Glotech. Its sales network also expanded to the United States, China, India, Europe, and Latin America, including Korea. Adding high-value automotive parts materials owned by Kolon ENP, the company plans to provide customized solutions that meet diverse demands from global customers. It will also enter the medical device industry, where customers outside automobiles are concentrated.
Synergy from integrating research and development (R&D) is also expected. Leading Korea's chemical industry since 1957, Kolon Industries has chemical materials technology that can satisfy various properties required for high-value materials, such as waterproofing, soundproofing, durability, and heat resistance. In addition, high-value products such as modified polyphenylene oxide (mPPO), a material related to AI accelerators, have already been developed and are on sale. Based on synergies from the merger, Kolon Industries plans to further speed up the development of advanced engineering plastics and high-strength composite materials.
There are also benefits in terms of profitability. By integrating the purchasing, production, sales, and logistics organizations of the two companies, duplicate costs can be reduced, and strengthened purchasing bargaining power through economies of scale is expected to help improve Kolon Industries' profitability going forward. In addition, increased assets and improved cash flow are expected to accelerate the development of new products in the future.
Heo Sung, president of Kolon Industries, said, "This merger is a decision that serves the interests of both companies in terms of shareholder value and future development," adding, "Kolon Industries will continue to focus on shifting its portfolio toward high-value products."