[Alpha Biz= Kim Jisun] SEOUL, July 14 – Shares of S&D Co., a key ingredient supplier for Samyang Foods, tumbled more than 17% on concerns over the potential erosion of its exclusive supply position.
S&D closed at 1,084,000 KRW on the KOSDAQ on Monday, down 17.69% from the previous session. During intraday trading, shares fell as much as 25.89% to 976,000 KRW. The sell-off was driven by news that Samyang Foods has signed a stock purchase agreement (SPA) to acquire 100% of local sauce producer G&F for an estimated 60 billion KRW.
The move marks Samyang's first major M&A deal in nearly a decade, following its acquisition of frozen food company Saeachim (now Samyang Square Meal) in 2015.
S&D currently supplies key sauce ingredients for Samyang’s flagship Buldak-bokkeum-myeon spicy noodle line. Market participants fear that Samyang’s acquisition of G&F could lead to internalization of sauce production, threatening S&D’s sales and profit margins.
Foreign and retail investors offloaded S&D shares worth approximately 5.15 billion KRW and 660 million KRW, respectively.
G&F, the acquisition target, is known for supplying soup bases to other major Korean food companies, including Nongshim and Ottogi. In 2023, G&F posted revenue of 41.7 billion KRW and an operating profit of 3.2 billion KRW.
Samyang Foods shares also dipped slightly, closing at 1,462,000 KRW, down 0.54% on the day.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
