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Dongwon Now Seeking 50% Share In Calvo

The Korean food company Dongwon Group intends to acquire 50% share of the multinational Galician canning Grupo Calvo. The operation would reach an amount of Euro 200 million, although sources from the Spanish company denied any “advanced talks” about it and that, in any case, the Calvo family intends to keep more than 50% of the company and decision-making power within the group.
The interest of Dongwon, which was founded in 1969, came in the form of a letter of intent submitted end last year. In principle, Novagalicia Bank, Liberbank and Banca Civica had put their 22.1% stake in the Galician canning group up for sale. This capital, invested almost nine years ago, was handled by Ponto Inversiones, and in November it was said that the potential buyer “would come from the financial world.” However, according to market sources, the current scenario derived from the economic crisis in Spain discourages this option. The proposed sale -placed by Arcane and Savings Corporation (Madrid)- seems to attract more interest from international industrial groups, and in particular that of the South Korean group.
The 22.1% sold by the Calvo heirs to three banks: Caixanova, Caja Castilla and Caja Burgos, respectively, could be increased by a sale of shares by any of the Calvo family members, so that the extent of the share-transaction could become much wider than initially expected.
The Calvo family currently owns 77.8% of the company and although the Spanish tuna canner has repeatedly insistent that the family  “in no case would lose control of the majority”, the interest by the Koreans in the Galician company is undeniable, and part of their ambition to become the # 1 producer of canned tuna in the world.  Dongwon bought in 2008 the U.S. firm StarKist Tuna and last year acquired a Senegalese cannery.
Calvo reported earnings before interest and taxes (EBIT) of  Euro 27.1 million for 2010, representing an 80 percent increase compared to 2009. The company’s revenues totaled Euro 492.1 million.
Calvo might be an appetizing dish for Dongwon after it showed growing revenues again in 2011, exceeding Euro 500 million. Calvo says it is present in over 70 countries and still expanding. Nowadays 73% of Calvo’s turnover is generated outside of Spain, mostly in Brazil. As canned tuna brand leader in Spain the company has domestically little space to further grow, and continues to move gradually into the U.S. market and China, and has consolidated its position in several countries of Latin American markets, especially in Brazil. In that country Calvo has a 45% market share in domestic canned tuna sales with its brand Gomes da Costa