South Korean tobacco giant KT&G Corp. rejected a 1.9 trillion won ($1.5 billion) takeover offer for its ginseng subsidiary from activist investor Flashlight Capital Partners, defending its strategy to maintain three core business segments.
The company dismissed FCP’s unsolicited proposal to acquire Korea Ginseng Corp., saying the October bid came without prior discussion. KT&G also refuted FCP’s claim about the unit’s valuation range of 1.2 trillion won to 1.3 trillion won, noting these figures were merely analyst estimates cited during an investor presentation.
The rejection aligns with KT&G’s previously announced growth strategy, which positions health functional foods alongside overseas tobacco sales and next-generation products as primary revenue drivers. Market observers suggest the deal’s prospects were limited from the start, given KT&G’s current ownership structure.
FCP had proposed acquiring 100% of KGC’s shares, targeting one of Asia’s largest ginseng producers. The activist fund’s move marks another attempt by foreign investors to reshape South Korean corporate structures, following similar campaigns at larger chaebols.
The rebuff indicates KT&G’s commitment to its diversification strategy as it navigates shifting consumer preferences in its traditional tobacco market.
