Jungheung Construction to sign deal to buy Daewoo E&C this week

The corporate log of Daewoo E&C. (Yonhap)

Jungheung Construction, a midsized local builder, said Wednesday that it will sign a deal this week to buy a controlling stake in Daewoo Engineering & Construction Co.

In July, Jungheung Construction was named the preferred bidder to take over the 50.75-percent stake in its bigger rival from an investment fund under the state-run Korea Development Bank (KDB).

The deal is known to be worth around 2 trillion won ($1.7 billion).

In 2018, Hoban Construction Co. was selected as a preferred bidder to buy a stake in Daewoo E&C, but it later dropped its bid to buy the bigger rival, citing hidden losses in Daewoo E&C's overseas businesses.

In April, Daewoo E&C reported a first-quarter net profit of 147.9 billion won, up 138.9 percent from a year earlier. The builder's operating profit nearly doubled to 229.4 billion won in the January-March period.

Jungheung's takeover of Daewoo E&C will take a month to be completed depending on the regulator's approval.

Jungheung is the 17th largest builder in terms of capacity, while Daewoo E&C ranks third. (Yonhap)