Two leading global proxy advisory firms are divided over Doosan Group’s proposal to spin off Doosan Bobcat from Doosan Enerbility and merge it with Doosan Robotics. Institutional Shareholder Services (ISS) has urged Doosan shareholders to reject the proposal, citing “significant conflicts of interest,” while Glass Lewis has endorsed it, claiming it will “lead to greater returns.”
Glass Lewis has recommended that shareholders vote in favor of the spin-off and merger proposal, which is on the agenda for Doosan Enerbility’s extraordinary general meeting scheduled for Dec. 12, according to people familiar with the matter on Dec. 1.
The spin-off would change Doosan Group’s current governance structure, which positions Doosan Corporation as the parent company of Doosan Enerbility and Doosan Robotics, with Doosan Bobcat as a subsidiary of Doosan Enerbility. Under the spin-off plan, Doosan Bobcat would be split from Doosan Enerbility and transferred to Doosan Robotics as a subsidiary, creating a new hierarchy.
Glass Lewis explained the spin-off would allow Doosan Enerbility to focus on its core energy businesses, including large-scale nuclear power plants, next-generation nuclear reactors such as small modular reactors (SMRs), and gas turbines. The proxy advisory firm also claimed the spin-off would boost Doosan Enerbility’s investment capacity and allow Doosan Robotics to strategically leverage Doosan Bobcat’s extensive global network.
“Ultimately, the spin-off will yield higher returns and foster growth,” said Glass Lewis. “There are compelling reasons for investors to support this proposal.”
In contrast, ISS has advisted shareholders to vote against the proposal, expressing concerns about conflicts of interest. ISS pointed out that Doosan Group’s controlling shareholders, including Chairman Park Jeong-won’s family, could use their influence over both robotics and energy operations for their own benefit at the expense of minority shareholders.
“Although the proposal has been reviewed by an external evaluator, it lacks sufficient safeguards against conflicts of interest and has not been assessed by a special committee of independent directors,” ISS stated.
Under Korea’s Commercial Act, the spin-off requires a special resolution at the shareholders’ meeting, with approval from at least two-thirds of voting shareholders. Doosan Corporation, the largest shareholder, and its affiliated parties hold a combined 30.67% stake. The National Pension Service holds a 6.85% stake, while foreign investors account for roughly 23% of Doosan Enerbility’s shareholders.
Doosan Group plans to complete the spin-off on Jan. 31, following the shareholders’ meeting next week. However, with the two major proxy advisory firms offering opposing recommendations, the outcome of the meeting remains uncertain.
