KOTRA played a major role in landing the deal between the South Korean and American companies. The agency worked as a middleman to help officials at each company communicate and provide information and get both textile companies to agree on the acquisition price from the early stages of the process. (Image: Yonhap)
SEOUL, March 21 (Korea Bizwire) – South Korean textile company Samil Spinning has acquired the American company Buhler Quality Yarns through a stock purchase agreement amid fears of trade protectionism in America, according to the Korea Trade-Investment Promotion Agency (KOTRA).
Samil’s cunning move to take over all shares of Buhler Quality Yarns will see the company enjoy a 32 percent tax reprieve for producing textiles using thread made in the U.S.
The textile company’s latest business strategy is likely to make its foray into the American market much smoother.
KOTRA played a major role in landing the deal between the South Korean and American companies. The agency worked as a middleman to help officials at each company communicate and provide information and get both textile companies to agree on the acquisition price from the early stages of the process.
“Other major American companies in the industry joined the bidding, but Samil Spinning’s strong will to acquire Buhler Quality Yarns and our effort to provide access to as much valuable information as possible got us through to the end,” KOTRA said.
As a result of the deal, the South Korean textile company will now be entitled to benefit from the Dominican Republic-Central America FTA (CAFTA-DR), leaving it with more possibilities in a new market.
The CAFTA-DR, a free trade agreement between United States and Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic, was signed back in 2004.
Samil Spinning, located in the city of Gyeongsan in Gyeongsang Province, was established in 1983. Last year, the company that mainly handles cotton spinning, flax and linsey-woolsey reported annual earnings of 930 billion won. Any clothes made with American yarn in member countries of the CAFTA-DR are treated as equal when it comes to exporting within the specified region under the trade deal, regardless of the nationality of stock holders.
Buhler Quality Yarns is a sister company of Swiss company Hermann Buhler with 205 years of history, and boasts a strong customer base as well as competitive high-quality products.
Ashley Song (ashley@koreabizwire.com)
