The rapidly changing global economic environment has brought technological security into the spotlight as a means of defending corporate management rights. The case of Korea Zinc exemplifies how such strategies can be effectively applied and yield tangible results.
Technological Security and Korea Zinc’s Defense of Management Rights
Young Poong Group and the global private equity firm MBK Partners joined forces to attempt a takeover of Korea Zinc. MBK Partners, funded by overseas investors in countries such as Japan and Canada, presented Korea Zinc with a justification for its defense strategy.
In response to the takeover attempt by MBK Partners and Young Poong Group, Korea Zinc adopted various countermeasures, including a public tender offer for treasury shares. One key strategy was leveraging national-level technology protection as a defensive mechanism.
On September 24, 2024, Korea Zinc submitted an application to the Ministry of Trade, Industry, and Energy to designate its precursor manufacturing technology as “National Core Technology” and “National Advanced Strategic Technology.” This technology is crucial in the secondary battery industry, where China dominates over 75% of the global market, and is essential for securing domestic industrial competitiveness.
Impact of National Core Technology Designation
On November 18, 2024, Korea Zinc’s precursor manufacturing technology was officially designated as “National Core Technology.” This significantly constrained MBK Partners’ takeover attempt. Under the Industrial Technology Protection Act, companies with national core technologies require government approval for overseas sales or technology transfers. This put Korea Zinc in a favorable position to defend its management rights.
Additionally, the national significance of this technology was highlighted, fostering consensus on the importance of preventing technology leaks and protecting domestic industries. Korea Zinc’s case demonstrated that national technology protection not only strengthens corporate competitiveness but also plays a pivotal role in defending management rights, thereby directly contributing to national industrial competitiveness and technological security.
Escalation of Conflict with MBK Partners
Young Poong Group and MBK Partners filed a lawsuit, claiming that Korea Zinc’s public tender offer and paid-in capital increase caused the company financial losses amounting to several billion won. MBK Partners also emphasized that while a resale to China or other foreign entities could raise concerns, there were no current plans for such a sale.
However, with the designation of Korea Zinc’s technology as national core technology, the likelihood of MBK Partners successfully completing the takeover has significantly diminished.
Expanding the Value of Industrial Technology Protection
The ongoing dispute between Korea Zinc, Young Poong Group, and MBK Partners underscores that technological security is not merely about protecting technology and enhancing industrial competitiveness. It also serves as an effective tool for defending management rights. Moving forward, management defense strategies centered on technology protection are expected to become an essential approach for strengthening the competitiveness of both corporations and nations amidst evolving global business dynamics.
