Doosan Group to merge Bobcat, Doosan Robotics

Doosan Group’s merger of equipment manufacturer Doosan Bobcat and Doosan Robotics could advance its equipment technology and give Doosan Group more control of Bobcat. 

South Korea-based Doosan Group announced July 11 it would merge Bobcat under Robotics in a stock swap where Robotics is valued higher than Bobcat, and received backlash from minority shareholders, or those invested in Bobcat outside of Doosan Group. 

The merger will allow for innovation, Doosan Bobcat spokesperson Jihyang Kim told Equipment Finance News. 

“Doosan Bobcat plans to leverage Doosan Robotics’ software and robotization technology to accelerate and secure continued competitiveness in the industrial equipment market,” she said in a statement. She declined to answer questions on how Bobcat and Robotics would collaborate after the merger, saying the decision is not finalized. 

Bobcat, which Doosan acquired from Ingersoll Rand for $4.9 billion in 2007, is ranked 10th in the Yellow Table with a 2.9% share of global construction equipment sales. The Yellow Table, published by KHL Group, ranks the top 50 OEMs globally.  

Doosan’s tech innovation hopes 

The merger, according to a recent Doosan presentation, will:  

• Expand Robotics’ market presence globally using Bobcat;  

• Allow Robotics to use Bobcat production facilities; and  

• Create professional robots for commercial equipment. 

Achieving a leading position in autonomous off-road vehicles and machines is a priority for the company, as well as the research and development of AI tech, according to an Aug. 4 Bobcat shareholder letter. 

Minority shareholder concerns 

The companies would merge with a stock swap where one Bobcat stock would be traded for 0.63 Robotics shares, despite Bobcat having $8.31 billion in assets as of the first quarter of 2024, compared to Robotics’ $329 million in assets in Q1. 

In Aug. 4 letters issued by Bobcat and Robotics to shareholders after some raised concerns that their ownership and value would be diminished by the merger, Bobcat CEO Scott Park emphasized the value of the combined company. 

“While some have focused on just the fact that Doosan Bobcat shares will be exchanged for Doosan Robotics shares, we would like to reiterate that the substance of the combined entity must be considered,” the letter reads. 

However, the merger has the potential to harm minority shareholders, Florida State University strategic management professor David King told EFN. 

“The minority shareholders of Doosan Bobcat will see their ownership diluted compared to Doosan Robotics and the Doosan holding company,” he wrote. 

In the United States, such a merger could be stopped under fair value disclosure requirements, King said.

“It could be completed in the U.S., but the holding company would be sued. A merger in the U.S. needs to have a fair value opinion,” he wrote. 

The merger has drawn South Korean regulators’ attention, according to reports in the South Korean press. 

A shareholder’s meeting to vote on the merger will be held Sept. 25, according to a July Doosan presentation. Doosan Group has said the merger will be complete by early 2025. 

Editor’s note: all monetary figures were translated from Korean won to USD. 

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