South Korea’s Doosan Corp. said on Tuesday its board has decided to separate the company’s fuel cell and battery foil and OLED material business units to capitalize on the growth potential as independent entities.
The two new companies, tentatively named “Doosan Fuel Cell” and “Doosan Solus,” respectively, will go independent as of Oct. 1 and will be listed on the stock market. The demerger is subject to approval at a special shareholder’s meeting due on Aug. 13 and other customary conditions.
Doosan said the separation will help promote fast growth of the two businesses based on recent market outlooks and an aggressive and agile business development approach is needed to take leadership in the market.
Doosan Fuel Cell will be dedicated to fuel cells for power generation, while Doosan Solus will produce battery foil, OLED and biotech materials. Fuel cell business has prospective potentials due to low carbon footprint and little impact from weather extremities. The OLED market is expected to grow in the future as demand is rising fast for TV and auto panels beyond smartphones, the company said.
Market analysts showed positive responses to the plan. Mirae Asset Daewoo said the spinoff will provide an opportunity for the discounted Doosan stock to be re-valuated on a reduced financial risk. Hana Financial Investment said there will be sufficient room for a stock price increase of the two new entities and it will be less likely to see a big drop in Doosan’s stock value after the separation because the company is committed to high dividend payments.
By Chun Gyung-woon and Minu Kim
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