[Edaily Reporter kim mi-kyung ] SEMPIO FOODS(248170)will merge with its holding company, SEMPIO. The plan is to streamline the holding company structure and reorganize the management structure around the operating company to enhance investment responsiveness and management efficiency.

According to the Financial Supervisory Service’s electronic disclosure system on the 30th, SEMPIO FOODS announced that it held a board meeting that day and decided to merge with its holding company, SEMPIO, through an absorption merger. Following the merger, SEMPIO FOODS will be the surviving company, and it will succeed to the trade name and business operations of SEMPIO, the dissolving company.

The core objective of this merger is to integrate the assets, financial resources, investment and management functions, as well as manufacturing and sales functions that were previously分散 across the two companies. The merger structure designates SEMPIO FOODS—which conducts actual business operations—as the surviving entity. SEMPIO FOODS holds production facilities, business licenses, employment relationships with approximately 800 executives and employees, and major domestic and international business contracts. The company explained that by maintaining the core of its business operations, it can minimize administrative burdens related to contracts and permits, as well as operational disruptions that may arise during the merger process.

The move also aims to proactively address changes in regulations and accounting standards related to holding companies. Since SEMPIO falls short of the 500 billion won total asset requirement for holding companies under the Fair Trade Act, it is scheduled to be excluded from the holding company classification once the grace period ends on June 30 of next year.

The new accounting standard (K-IFRS No. 1118), which takes effect in 2027, is another variable. This is because equity method income, which was previously recognized as operating revenue, will be excluded from operating profit or loss, potentially reducing the reported operating results in the separate financial statements. SEMPIO explained that it is proceeding with the merger to address the uncertainty arising from these regulatory changes and to establish a stable foundation for management.

From a financial perspective, the operating company’s direct assumption of SEMPIO’s substantial cash and cash equivalents is expected to reduce the burden of interest expenses associated with external borrowing and enable the efficient securing of investment funds. Based on the secured capital, SEMPIO FOODS plans to accelerate large-scale capital expenditures (CAPEX), such as the construction of a new factory in Jecheon and the expansion of the Yeongdong factory, to meet the growing global demand for K-Food. In addition, the company intends to focus its efforts on research and development (R&D) of high-value-added bio-materials based on microbial fermentation, leveraging the fermentation technology accumulated over 80 years.

The merger ratio between the two companies has been set at 2.0881235 shares of SEMPIO common stock for each share of SEMPIO FOODS common stock, and 4,208,546 new shares will be issued during the merger process. As a result of this merger, the largest shareholder will change from the existing SEMPIO to Park Jin-seon, CEO of SEMPIO FOODS. SEMPIO FOODS plans to cancel all 2,255,842 treasury shares acquired during the merger process within one year of the merger date; once the cancellation is complete, CEO Park’s stake will increase to 31.51%.

SEMPIO FOODS plans to hold a shareholders’ meeting on December 17 to vote on the merger proposal. The merger effective date is February 1 of next year, and the new shares resulting from the merger are scheduled to be listed on February 18.

A SEMPIO official stated, “This merger is a decision to consolidate the management resources and financial capabilities that were previously分散 across the holding company, SEMPIO, and the operating company, SEMPIO FOODS, into a single entity in order to focus on core businesses and future growth engines,” adding, “We will proactively respond to anticipated regulatory changes and enhance management efficiency while continuously increasing corporate value and shareholder value.”