Dongwon Industries to Cancel 22.5% of Shares to Boost Shareholder Value

SEOUL - Dongwon Industries Co., a prominent South Korean conglomerate and the parent company of U.S.-based StarKist Co., announced plans to cancel 22.5 percent of its outstanding shares. This strategic move aims to enhance shareholder value and support the company's share price.

According to Yonhap News Agency, The decision, made during a board meeting on Tuesday, involves the cancellation of 10.47 million shares, valued at 329 billion won (approximately $247 million), scheduled for May 2. This announcement follows Dongwon Industries' acquisition of StarKist for US$363 million in 2008 as part of its expansion strategy. Dongwon Industries is a major player in the canned tuna-to-logistics sector and serves as the holding company of Dongwon Group.

Following the news, Dongwon Industries' shares saw a substantial increase, closing 26 percent higher at 39,550 won on Tuesday. This surge in stock value significantly outperformed the broader Korea Composite Stock Price Index (KOSPI), which experienced a 1.1 percent loss on the same day. Notably, Dongwon Industries' shares had previously faced a decline, dropping 33 percent to 33,300 won at the end of 2023 from 49,350 won a year earlier. In contrast, the KOSPI had risen 19 percent to 2,655.28 during the same period.

According to the company's statement, the total number of stocks will be reduced to 36.02 million following the share cancellation. This step is part of Dongwon Industries' ongoing strategy to manage its treasury stocks effectively. In August of the previous year, the company had already canceled 3.5 million treasury stocks and plans to continue this practice over the next five years.

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