[Photo by Asia Cement Co.]
South Korea’s mid-tier cement producer Asia Cement Co. won a bid to acquire a full stake in Halla Cement Corp. and its stock gained as much as 30 percent upon the news that would make the company share the rank as one of industry leaders.
According financial industry sources on Friday, Hong Kong-based Baring Private Equity Asia, the largest shareholder of Halla Cement, and its sales advisor Citigroup Global Market Securities Korea picked Asia Cement as the preferred bidder for a full stake in Halla Cement. They aim to sign a share purchase agreement by the end of this month. Shares of Asia Cement closed Friday at 118,000 won, up 27,000 won or 29.7 percent from the previous session.
Asia Cement is said to have proposed between 700 billion won and 800 billion won for a 100 percent stake in Halla Cement. Baring PEA currently holds a full stake in Halla Cement.
Upon acquiring Halla Cement, Asia Cement’s share in the local cement market would jump to 20 percent from current 7 percent, placing the merged entity at par with market leaders Ssangyong Cement Industrial Co. and Hanil Cement Co.
The marriage is also expected to create synergy effects because Asia Cement’s business is mainly positioned in the country’s inland area whereas Halla Cement has factories in coastal regions.
Baring PEA acquired Halla Cement. The fund manager in a consortium with Seoul-based Glenwood Private Equity bought Halla Cement for around 550 billion won in April last year. Baring PEA later became the sole owner of Halla Cement after it bought the rest stake from Glenwood.
By Chung Seung-hwan and Cho Jeehyun
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]