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The KG Group (, ) is a South Korean
chaebol A chaebol ( , ; , ) is a large industrial South Korean conglomerate run and controlled by an individual or family. A chaebol often consists of multiple diversified affiliates, controlled by a person or group. Several dozen large South Kore ...
established in 2003 and operating, through its
affiliates In the broadcasting industry (particularly in North America, and even more in the United States), a network affiliate or affiliated station is a local broadcaster, owned by a company other than the owner of the network, which carries some or al ...
, in various industries and other businesses (including chemicals, steel, services, and media). The main affiliates of the KG Group are KG Chemical (its core company) and KG Steel. The KG Group expanded through
mergers and acquisitions Mergers and acquisitions (M&A) are business transactions in which the ownership of a company, business organization, or one of their operating units is transferred to or consolidated with another entity. They may happen through direct absorpt ...
.


History

In 1985, Kwak Jae-sun and other investors founded Seil, a power plant company. In 2003, Kwak sold his Seil stake and used the money obtained to acquire a company under receivership, Gyeonggi Chemical (later renamed KG Chemical), initially a fertilizer producer which diversified through merging, and established the KG Group ''chaebol''. In the following years, the KG Group expanded through a
mergers and acquisitions Mergers and acquisitions (M&A) are business transactions in which the ownership of a company, business organization, or one of their operating units is transferred to or consolidated with another entity. They may happen through direct absorpt ...
strategy. In 2005, it acquired the cogeneration company Sihwa Energy (later renamed to KG Energy and then KG ETS), and in 2008, it purchased the delivery company Yellow Cap (KG Yellow Cap). In 2010, it acquired waste treatment company Eco Service Korea (name changed to KG ETS after being merged with KG Energy in 2011), the fund evaluation company Zeroin (KG Zeroin), and the media company Edaily. In 2011, the KG Group acquired the e-commerce company Inicis (renamed KG Inicis) and its subsidiary, the electronic payment provider Mobilians (KG Mobilians). In 2013, it acquired Eduone (renamed KG Eduone). In 2015, KG Inicis acquired Dongbu Parcel from the Dongbu Corporation and merged it with KG Yellow Cap, the combination renamed KG Logis, but sold it in 2017. In 2016, KG Inicis also took a 60% stake in Samsung Allat from
Samsung C&T Corporation Samsung Construction and Trading Corporation (; stylized as Samsung C&T) is a South Korean construction and engineering company. It was founded in 1938 as the first Samsung company and was initially involved in construction and overseas trading ...
and Samsung Card (later changed its name to KG Allat and merged with KG Mobilians in 2019) and the South Korean
KFC KFC Corporation, doing business as KFC (an abbreviation of Kentucky Fried Chicken), is an American fast food restaurant chain specializing in fried chicken and chicken sandwiches. Headquartered in Louisville, Kentucky, it is the world's se ...
franchise in 2017 from
CVC Capital Partners CVC Capital Partners plc is a Jersey-based private equity and investment advisory firm with approximately €186 billion of assets under management and approximately €157 billion in secured commitments since inception across American, European, ...
. In April 2023, the KG Group sold KFC Korea to Orchestra Private Equity. In May 2019, the KG Group established a special purpose corporation (SPC), KG Steel, by investing funds from group affiliates (such as KG Chemical and KG ETS), in order to take a 40% controlling stake in Dongbu Steel. It formed a consortium with Cactus Private Equity, a South Korean private equity fund, to finish the transaction. The acquisition was completed in August 2019 and the assets of the KG Group increased from at the end of 2018 to . In October 2020, KG Inicis, through a SPC called Crown F&B, acquired a 93.8% stake in Hollys F&B (the operator of the Hollys Coffee coffeehouse franchise) from IMM Private Equity, a private equity fund manager. In June 2022, the KG Mobility consortium (KG ETS, KG Mobilians, KG Steel, Cactus Private Equity, KG Inicis, and Pavilion Private Equity), a KG Group affiliate, was selected as the final bidder for South Korean car manufacturer
SsangYong Motor The KG Mobility Corporation (, ), abbreviated as KGM, is a South Korean automobile manufacturer. It traces its origins back to Dong-A Motor, a manufacturer established in 1954. The company was named SsangYong Motor Company in 1988, following i ...
. In August 2022, South Korea's Free Trade Commission approved KG Group acquisition of a 61% controlling stake in receivership-bound SsangYong. The acquisition payments were completed later that month. In September 2022, the Seoul Bankruptcy Court agreed to SsangYong's receivership exit plan, including issuing new shares in order to pay the creditors. The KG Group was set to start the process to exit SsangYong's receivership in early October and finish the acquisition process on or before 14 October, the SsangYong sale deadline. After delays, the consortium started the receivership exit procedures on 31 October by requesting the receivership termination to the Seoul Bankruptcy Court. The Court approved the receivership exit on 11 November, finalising the consortium's acquisition. In December 2022, Kwak said SsangYong would be renamed as KG Mobility by March 2023.


Corporate


Structure

As other ''chaebol'', the KG Group is not a single company controlling others but rather a loose grouping of companies (affiliates) that is linked through a complex, circular
cross ownership Cross ownership is a method of reinforcing business relationships by owning stocks in the companies with which a given company does business. Heavy cross ownership is referred to as circular ownership. In the US, "cross ownership" also refers t ...
structure. By June 2020, the structure was centred around three companies: KG Chemical (the core company of the group and parent), KG Zeroin (the largest KG Chemical shareholder, majority controlled by the Kwak family) and KG (a
holding company A holding company is a company whose primary business is holding a controlling interest in the Security (finance), securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own Share ...
). In January 2021, the KG holding was merged into KG Chemical. In December 2022, in order to avoid some South Korean regulations, KG Inicis donated part of its minority KG Chemical stake to a non-profit foundation. In June 2023, KG ETS broke its existing cross shareholding by selling its minority stake in KG Chemical to KG Zeroin, leaving the ownership structure centred around KG Chemical, KG Zeroin and KG ETS. The two main affiliates of the KG Group by business volume are KG Chemical and KG Steel. The KG Group affiliates are set up to work autonomously and are called "family" instead of affiliate internally. , the number of affiliates was 21 domestic and 8 overseas.


Branding

According to Kwak, the KG Group name is an
initialism An acronym is a type of abbreviation consisting of a phrase whose only pronounced elements are the initial letters or initial sounds of words inside that phrase. Acronyms are often spelled with the initial letter of each word in all caps wi ...
for "Korea Green". The KG Group has two logos, often used in conjunction: a wordmark with "KG" in
sans-serif In typography and lettering, a sans-serif, sans serif (), gothic, or simply sans letterform is one that does not have extending features called "serifs" at the end of strokes. Sans-serif typefaces tend to have less stroke width variation than ...
script and a purple, violet, orange, and yellow logo simbolising a prism. The official font for the KG Group is Avenir. The slogan is "think great" with the k and g letters stilised in uppercase.


Main affiliates


KG Chemical

''KG Chemical Co., Ltd.'' (), traded as , is a company producing chemical products such as chemical fertilizers, concrete admixtures, heavy water agents, and purifiers. In 2022, it posted in revenue and in operating profit. Its net profit was . End-of-year assets were valued at . Gyeonggi Chemical (the previous name of KG Chemical) was established in 1954 and its main product was chemical fertilizers. By 2000, it was the largest in the domestic fertilizer market. The company was listed on the South Korean stock market in 1989. Following the
1997 Asian financial crisis The 1997 Asian financial crisis gripped much of East Asia, East and Southeast Asia during the late 1990s. The crisis began in Thailand in July 1997 before spreading to several other countries with a ripple effect, raising fears of a worldwide eco ...
, Gyeonggi Chemical sold off its affiliates (Gyeonggi Mining and Daljae General Trading Corporation) but it did not make a major restructuring to improve its financial situation. The company declared bankruptcy in 1999. In 2002, the
Mitsubishi Group The is a group of autonomous Japanese multinational companies in a variety of industries. Founded by Yatarō Iwasaki in 1870, the Mitsubishi Group traces its origins to the Mitsubishi zaibatsu, a unified company that existed from 1870 to 1946 ...
, with which Gyeonggi Chemical had a partnership, formed a consortium and tried to take over, but it failed. The company was acquired by Kwak in 2003 and adopted its current name. In 2017, it acquired Enerchem, which produces high-purity nickel sulfate, a raw material for
rechargeable battery A rechargeable battery, storage battery, or secondary cell (formally a type of energy accumulator), is a type of electrical battery which can be charged, discharged into a load, and recharged many times, as opposed to a disposable or prima ...
cathode active materials. The company's first base (plant and headquarters) was in
Bucheon Bucheon (; ) is a city in Gyeonggi Province, South Korea. Bucheon is located away from Seoul, of which it is a satellite city. It is located between Incheon and Seoul. Bucheon is the second most densely populated city in South Korea after Seo ...
. In 1982, it built a second plant at Onsan (a port in
Ulsan Ulsan (; ), officially the Ulsan Metropolitan City, is South Korea's seventh-largest metropolitan city and the eighth-largest city overall, with a population of over 1.1 million inhabitants. It is located in the south-east of the country, neighbo ...
). The Bucheon facilities were sold off in 2013 and the company moved its headquarters to Onsan.


KG Steel

''KG Steel Co., Ltd.'' () is a producer of steel-related products. KG Steel's 2022 revenue was and net profit . Assets were .


Other publicly-listed operations

The following table is a summary of the other publicly listed KG Group affiliates :


References

{{Reflist Chaebol Companies based in Seoul Conglomerate companies established in 2003 South Korean companies established in 2003