Korean firms split and merge to sharpen business focus

A wave of corporate restructuring is sweeping through South Korea's industrial sector, with major firms executing strategic splits, absorptions, and asset divestitures to streamline operations and sharpen their competitive focus. From chemical manufacturers spinning off data center units to beauty brands merging production subsidiaries, the moves signal a broader push to shed non-core assets and integrate value chains.

Kumyang is carving out its data center business into a new entity named KYDC through a physical spin-off scheduled for Dec. 5. The move separates 475.2 billion won ($354 million) in assets dedicated to data center infrastructure, power supply, and battery recycling from Kumyang's traditional foaming agent and resource development lines. The remaining company will hold total assets of 1.17 trillion won ($876 million), allowing it to concentrate investment on primary lithium battery materials and mining ventures while the new unit pursues independent growth in digital infrastructure.

In the beauty sector, APR is absorbing its wholly owned subsidiary, APR Factory, in a small-scale merger set for Dec. 31. The consolidation brings production and logistics functions currently spread across facilities in Gasan and Pyeongtaek directly under the parent company's control. APR Factory generated sales of 118.7 billion won ($88.5 million) last year and turned profitable after posting losses in 2023; the merger aims to optimize the supply chain for APR's expanding line of home beauty devices and cosmetics.

Broadcasting and leisure conglomerate KX has adjusted its timeline to absorb M&C Net Media by Sept. 21 following administrative delays. The merger integrates the media subsidiary's broadcasting channel operations with KX's existing semiconductor materials and golf course businesses. Company officials stated that unifying these entities will improve management efficiency and leverage synergies across manufacturing and leisure divisions, which drove a 66.5 percent jump in operating profit during the first half of the year.

Jeju Air is exiting the hotel business entirely, agreeing to sell its stake in Pacific No. 3 Private Real Estate Investment to AK Town for 54 billion won ($40.3 million). The transaction allows the low-cost carrier to divest non-aviation holdings as it focuses on modernizing its aircraft fleet and recovering from recent operational losses. The sale proceeds come as the airline reported a significant operating deficit in the second quarter.

Auto parts maker SJG Sejong plans to merge with its central research institute by Oct. 30 to consolidate R&D capabilities. The integration combines technical teams currently operating in Ulsan, Yongin, and Shanghai to accelerate development of exhaust systems and new electric vehicle components. With exports accounting for the vast majority of its revenue, the company seeks to tighten its innovation pipeline amid steady demand from domestic automakers.