What Happened? The Merger of BGF Ecomaterials and Daewon Chemical

BGF Ecomaterials announced on August 27, 2025, that it will merge with its subsidiary, Daewon Chemical. BGF Ecomaterials will be the surviving entity.

Why the Merger? Background and Objectives

The primary objectives of the merger are to enhance management efficiency and strengthen business competitiveness. The strategy aims to improve operational efficiency through the reduction of overlapping organizations and management costs, streamlining the decision-making process, and securing new growth engines through synergy with Daewon Chemical’s business capabilities.

What Will Happen? Expected Effects and Risks

Expected Effects

  • Increased Management Efficiency: Reduction of overlapping organizations and costs, streamlined decision-making.
  • Strengthened Business Portfolio: Synergy creation and securing new growth drivers.
  • Economies of Scale: Enhanced cost competitiveness and increased market dominance.

Risks

  • Potential Lack of Synergy: Risk of failing to achieve expected synergy effects.
  • Continued Losses in Semiconductor Materials: Possibility of offsetting positive effects from the merger.
  • Volatility in Exchange Rates and Raw Material Prices: Potential deterioration of profitability due to external factors.

Investor Action Plan: How Should We View the Merger?

Investors should consider the following factors when making investment decisions.

  • Analyze the feasibility of achieving merger synergy.
  • Review the strategy for improving profitability in the semiconductor materials segment.
  • Consider strategies to address exchange rate and macroeconomic volatility.
  • Be mindful of stock price volatility after trading resumes.