Korea Zinc’s management is under pressure as its largest shareholder, Young Poong, has partnered with private equity firm MBK Partners to increase control over the company. Korea Zinc has resisted the move, calling it a hostile takeover attempt that could disrupt its long-term plans.

MBK Partners and Young Poong raised their offer on Thursday to about $565 (750,000 won) per share, a 14% increase from their previous bid. This would give the group control over 47.74% of Korea Zinc, valued at approximately $1.7 billion. The company’s shares jumped 6.5% following the revised bid, reaching 747,000 won.

Korea Zinc supplies essential materials for electric vehicles and renewable energy projects, among other products and services. The smelter is set to sell about $300 million (400 billion won) in commercial papers, and it may use the proceeds to continue resisting MBK and Young Poong Group’s takeover attempt.

WHY IT MATTERS

Korea Zinc stakeholders, particularly its workers, are likely suspicious of MBK’s attempts to acquire the company, given the private equity firm’s track record with Homeplus. Since acquiring the retail chain in 2015, MBK has sold off over 20 stores and significantly cut investments, leading to accusations of seeking short-term gains while neglecting long-term stability.

Workers at Korea Zinc likely fear a similar approach could take place if MBK takes control, leading to potential asset sales, reduced investment in key projects like battery materials and renewable energy, and a focus on maximizing short-term profits. Other corporate stakeholders, such as Hanwha and LG Chem, may support Korea Zinc’s attempts to resist the takeover bid. If MBK successfully acquires Korea Zinc and prioritizes short-term gains, it could disrupt the supply chain for critical materials such as zinc and other metals, increasing costs and uncertainty for industries heavily dependent on stable material flows, particularly in EV and battery production.

There are also likely similar concerns in Australia, where Korea Zinc has invested heavily in renewable energy projects. If MBK focuses on short-term profitability, it could delay or even cancel long-term investments, putting jobs and the region’s renewable energy goals at risk.