April 19, 2024

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[THE INVESTOR] High-profile investors such as MBK Partners, Stick Investment, TPG Capital, and Affinity Equity Partners are expected to compete in the race to purchase the 25.1 percent stake in Hanwha Chemical held by Samsung affiliates.

The Canadian Sovereign and Middle Eastern Sovereign Funds are also expected to take part in the preliminary bidding, according to industry sources on Dec.13. 

The bids will be received on Dec.20, with  Citigroup Global Market Securities managing the deal.

Samsung C&T holds a 20.05 percent stake, while battery-maker Samsung SDI holds the rest. Together, the shares said to be worth around at least 1 trillion won (US$916 million).

“Samsung appears to have decided to sell its petrochemical business considering the opportunity cost of various investment alternatives. It is expected to gain more than 1 trillion won in funds through the stake sale,” said an industry insider.

Hanwha Group bought the chemical firm from Samsung Group in 2015.
Samsung C&T will reportedly invest in new businesses with the proceeds from the stake sale. The Samsung unit has invested heavily in new businesses such as Samsung BioLogics, resulting in a market cap of more than 23 trillion won in just two years.

Demand for petrochemicals and refined products is usually accompanied by economic growth. The International Monetary Fund raised its growth forecast for Korea next year to 3.7 percent from 3.6 percent this year.

“The uptrend cycle of domestic chemical companies will continue next year due to global economic expansion and strengthened environmental regulations in China,” said Cho Hyun-ryul, an analyst at Samsung Securities.

By Alex Lee (alexlee@heraldcorp.com)