SEOUL, KOREA - Tongyang Group is reviewing a plan to split Tongyang Magic, its kitchen appliance company, into rental and non-rental units and sell off separately. That's because Kyowon Group and Japan's Paloma, the two suitors for Tongyang Magic, want to acquire two different units.
An investment banker said on June 2, "After due diligence, Kyowon Group concluded the non-rental unit has little value for acquisition. Meanwhile, Paloma said it wanted the non-rental unit only."
The rental unit of Tongyang Magic consists largely of the water purifier rental organization with 480,000 customers across the country. The company's rental unit sales revenue was 64 billion won last year. Kyowon Group hopes to acquire the unit and jump to a No. 2 position after Coway (current water purifier market share of 50%).
In contrast, Paloma is not interested in the rental unit at all as the company is a specialist in supplying gas ranges, water heaters, and boilers for more than 100 years.
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