South Korea’s KT&G Corp. is seeking to acquire Japanese ginseng producers after rejecting a 1.9-trillion-won ($1.3 billion) buyout offer from Singapore-based Flashlight Capital Partners for its wholly owned subsidiary Korea Ginseng Corp.
The tobacco and ginseng conglomerate has recently approached major accounting firms and investment banks to identify potential acquisition targets among Japanese ginseng and red ginseng suppliers, according to investment banking sources. KT&G didn’t specify a particular target company, but bankers estimate potential deals could be valued between 100 billion and 200 billion won ($70 million-140 million), reflecting the relatively smaller size of Japanese ginseng producers.
This international expansion follows KT&G’s November rejection of Flashlight Capital’s proposal for Korea Ginseng, which operates the well-known Jung Kwan Jang brand. Since 2022, the activist fund has pushed for spinning off and listing the unit, arguing KT&G’s control undervalues the ginseng business.
KT&G dismissed these claims, stating that Korea Ginseng wasn’t undervalued and that separation would weaken business synergies. The company has instead committed to growing its ginseng operation into a global brand while expanding its health functional foods division.
The Korean company has already established a foothold in Japan, recently partnering with retail giants Welcia and Aeon Mall to introduce its red ginseng products in their stores. Korea Ginseng contributed significantly to KT&G’s performance last year, generating 66.7 billion won in operating profit on sales of 1.1 trillion won.
