Nexon Group holding company NXC has bought back part of its own shares from the government that the family of late founder Kim Jung-ju (김정주) paid in kind as inheritance tax. With difficulties in selling the stake dragging on, NXC moved to buy it back directly. The government will secure more than 1 trillion won in non-tax revenue through the deal.

NXC said in a regulatory filing on May 11 that its board decided to acquire 184,001 treasury shares from the Ministry of Economy and Finance. The purchase price is 5,558,000 won per share, putting the total transaction value at about 1.02 trillion won. The shares represent 6.68 percent of total shares outstanding. NXC said it plans to cancel all the shares it acquires next month.

The deal will lower the government’s stake in NXC to 23.96 percent from 30.64 percent. After the treasury share cancellation is completed in June, the ministry’s final stake will be 25.68 percent.

Kim’s spouse Yoo Jeong-hyun (유정현) and their two children paid NXC shares worth about 4.7 trillion won to the ministry in 2023 as an in-kind inheritance tax payment and completed the payment process the following year. The government then sought a public sale of the stake through the Korea Asset Management Corporation (KAMCO), but faced difficulties including multiple failed bids, as NXC is unlisted and the structure makes it impossible to exercise management control even after acquiring the entire stake up for sale.

In the transaction, NXC is known to have used foreign-currency funds such as dividends from overseas entities to buy the in-kind payment shares. The sale price of 5,558,000 won per share is higher than the assessed value at the time of the in-kind payment of 5,534,000 won.

Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol (구윤철) told a press briefing that the shares could have been disposed of at a price lower than the assessed value at the time of the in-kind payment if a management-control premium was not recognized, adding that it was meaningful to sell them at a higher price. He said that because Nexon brought in overseas funds for the purchase, there is also a foreign-exchange market stabilization effect from foreign currency inflows. He added that the sale secures more than 1 trillion won in non-tax revenue, which is also a positive factor for fiscal management.