US lawmaker expresses concerns over MBK’s takeover bid for Korea Zinc

A member of the United States Congress has voiced concerns over the takeover bid by private equity firm MBK Partners Ltd for Korea Zinc, in collaboration with its largest shareholder, Young Poong Corp, citing issues related to critical minerals’ supply chains, according to the zinc company on Thursday.

Korea Zinc has been engaged in a protracted battle to fend off the takeover attempt by the MBK-Young Poong alliance, which began on September 13 with a tender offer to acquire an additional stake in the world’s largest refined zinc smelter.

In response, Korea Zinc, with backing from US-based Bain Capital, launched an extensive stock buyback program.

In a letter to Jose Fernandez, US undersecretary of state for economic growth, energy, and the environment, US Rep. Eric Swalwell (D-CA) emphasized that Korea Zinc has played a pivotal role in global efforts to expand and diversify the supply of critical minerals while reducing reliance on Chinese influence.

Swalwell raised concerns that, given MBK’s investment focus, entities linked to or financed by China may become involved in transactions if MBK successfully acquires Korea Zinc. He warned this could lead to technology transfers to Chinese entities and undermine the efforts of the United States and Korea to secure critical minerals supply chains.

The congressman urged the undersecretary to consult with South Korea’s foreign and trade ministries to ensure that the transaction is reviewed with consideration of economic and national security factors.

In response to Yonhap News Agency, MBK declined to comment on the letter.

Last month, the South Korean government included Korea Zinc’s high-nickel precursor manufacturing process in the list of national core and high-tech strategic technologies, a move initiated by the company. This designation requires approval from the trade ministry for any exports of this technology or foreign investments involving mergers, acquisitions, or joint ventures.

Currently, the Young Poong camp controls 40.97 percent of Korea Zinc, while Chairman Choi Yun-beom and his associates own about 34 percent. Korea Zinc is set to hold a shareholders’ meeting on January 23 to vote on the appointment of new board members proposed by both Korea Zinc and the Young Poong camp.