Taekwang Group has entered the acquisition battle for K Shipbuilding alongside Texas Pacific Group (TPG), a global private equity fund (PEF).
According to the investment banking (IB) industry on Nov. 13, Taekwang Group formed a consortium with TPG and recently submitted a letter of intent (LOI) to the selling side for K Shipbuilding’s management rights. The current largest shareholder of K Shipbuilding is the United Asset Management (UAMCO) and KHI consortium, which holds a 99.58% stake. The market estimates that the sale price will be formed at up to 500 billion won.
At least three or more parties, including the Taekwang and TPG consortium, have entered the K Shipbuilding acquisition battle. In particular, U.S. capital is reportedly showing great interest in this acquisition as the Korean shipbuilding industry is emerging as a core axis of the MASGA (Making American Shipbuilding Great Again) project.
United Asset Management (UAMCO) and the KHI consortium acquired a 99.58% stake in K Shipbuilding in 2021. The selling side received first-round letters of intent until Nov. 12, and additional negotiation tables are expected to be opened if there are candidates who present higher prices later. Samil PwC is serving as the sale manager for this transaction, with Hwawoo providing legal advisory services. The plan is to conduct the main bidding early next year after due diligence by the prospective buyers.
K Shipbuilding is considered one of the companies that can expect direct benefits from the MASGA project. This is because the Republic of Korea Navy Fleet Support Unit (CFAC) is located in Jinhae, South Gyeongsang Province, where the shipyard is situated, and the company has experience building warships in the past. K Shipbuilding also has the goal of securing the U.S. Navy’s maintenance, repair, and overhaul (MRO) business for 32 vessels annually in the medium to long term.
Taekwang Group recently acquired the management rights of Aekyung Industrial Co., a core affiliate of Aekyung Group, and also entered the acquisition of Aegis Asset Management, Korea’s top real estate asset management company. An IB industry official said, “As the downturn in Taekwang Group’s core chemical business has prolonged, the group is actively pursuing new businesses and redrawing the overall blueprint for the entire group.
Source: BusinessKorea