[비즈한국] The dispute between Sevenbrau and Daehan Flour Mills001130, which had continued for over three years, has come to an end. Through mediation by the Ministry of SMEs and Startups, the two companies agreed to withdraw all filings and lawsuits, and Daehan Flour Mills agreed to contribute 2.3 billion won to a win-win cooperation fund. With the legal disputes—previously cited as a major risk in Sevenbrau's sale process—now resolved, market interest is focused on whether future M&A efforts can pick up speed.
Sevenbrau-Daehan Flour Mills end 3-year dispute
The Gwangju-Jeonnam Regional SMEs and Startups Administration announced on the 16th that the dispute between Sevenbrau and Daehan Flour Mills has been completely resolved. Following the mediation of the Small and Medium Business Technology Dispute Mediation and Arbitration Committee under the Ministry of SMEs and Startups, both sides agreed to withdraw all reports and lawsuits filed against each other. Daehan Flour Mills will contribute 2.3 billion won as a win-win cooperation fund.
Lee Won-jung, Policy Chief at the National Assembly Speaker's Office, stated, "It was a difficult time for all parties involved. Sevenbrau suffered the pain of delisting and insolvency, and Daehan Flour Mills likely experienced significant distress as its reputation and brand value were damaged." She added, "I hope today's agreement serves as an opportunity for both companies to leap forward and innovate anew."
The conflict between Sevenbrau and Daehan Flour Mills originated from disputes over trademark rights and business operations surrounding the "Gompyo Wheat Beer," which the two companies had collaborated on to launch. After the trademark contract ended, differences in opinion over brand usage and the continuation of the business escalated into legal battles. Sevenbrau filed reports against Daehan Flour Mills for defamation and technology misappropriation, while Daehan Flour Mills countered by filing a defamation lawsuit and a lawsuit for confirmation of non-existence of debt against Sevenbrau.
As the dispute dragged on, Sevenbrau applied for mediation with the Technology Dispute Mediation Committee last September. The committee is a body that resolves disputes related to technology, intellectual property, and contracts between companies through mediation rather than litigation. After two rounds of mediation in October and January, the two companies reached a final agreement.
A notable aspect of this settlement is Daehan Flour Mills' 2.3 billion won contribution to the win-win cooperation fund. The win-win cooperation fund is private capital contributed by companies to a foundation for mutual growth with small and medium-sized enterprises (SMEs). It can be used for support projects targeting SMEs in general or by designating specific companies or fields.
A Ministry of SMEs and Startups official explained, "Since this fund was contributed during the process of resolving the dispute between the two companies, it is planned to be used in a way that benefits Sevenbrau. The beneficiary company will go through a process of using the funds according to the pre-established purpose and then reporting the results."
Cases of win-win cooperation fund contributions during dispute mediation are rare. In particular, the method of designating the opposing company for the contribution is considered exceptional. In the 2023 technical dispute between Algocare and Lotte Healthcare, both companies jointly contributed 300 million won to a win-win cooperation fund, but at that time, they did not designate a specific use for the funds.
The Ministry official stated, "The 2.3 billion won scale was agreed upon based on rational grounds during the mediation process, and it is difficult to disclose the specific calculation criteria. Daehan Flour Mills has already made the full contribution as a lump sum, and Sevenbrau can use it either in a single batch or in installments."
Eyes on the 2.3 billion won win-win fund; will Sevenbrau's M&A gain momentum?
The industry believes this agreement and the win-win fund contribution will serve as an opportunity to reassess Sevenbrau's corporate value. With the long-term litigation risk that had worried potential acquirers resolved, expectations are rising for a potential restructuring of the business using the fund. As the win-win cooperation fund can be used for technology development and market expansion, it is expected to contribute to easing the overall financial burden.
The Ministry official explained, "The scope for using the fund is quite broad. It is sufficient to cover a significant portion of costs required for general business operations such as manufacturing innovation, market expansion, product development, and management support."
Sevenbrau suffered from deteriorating management due to the expiration of the Gompyo Wheat Beer trademark contract in March 2023 and the overall slowdown in the craft beer market. Afterward, it filed for corporate rehabilitation in May of last year, and in August, its delisting from the KONEX market was decided, signaling a full-scale management crisis.
Sevenbrau is currently pursuing M&A prior to rehabilitation approval. It received court permission to initiate the sale process last October and is currently searching for potential buyers. However, market reaction has not met expectations in the approximately six months since the sale announcement. The deadline for submitting the rehabilitation plan has been extended multiple times as no buyer has been secured. On the 1st, the Seoul Rehabilitation Court extended the deadline for the rehabilitation plan, which was originally April 3rd, to May 1st.
According to Bizhankook's reporting, Sevenbrau is currently in contact with some potential buyers and is coordinating investment terms. However, it is reported that the process has not yet reached a concrete negotiation stage.
A Sevenbrau official stated, "It is true that there are candidates showing interest in our situation. However, no preferred bidder has been determined yet. This mediation has put an end to a long-standing legal battle. We expect that the removal of uncertainties surrounding the company will have a positive effect on the ongoing M&A process."