South Korea’s Hyundai Department Store Group is mulling to take over Hanwha L&C Corp., a standalone construction materials still bearing Hanwha trademark, to achieve economies of scale in furniture and home interior business.

In response to the takeover rumor, Hyundai Home Shopping Network Corp. admitted in a disclosure statement on Thursday that Hyundai Department Store was interested in Hanwha L&C, but added that nothing has been decided yet.

Cash-rich home shopping operator is expected to make the purchase.

The deal would create an industry leader through a merger with Hyundai Livart, a home interior unit of Hyundai Department Store.

Hyundai Livart’s sales from the interior business amounted to 1.4 trillion won ($1.2 billion) last year, and those of Hanwha L&C reached 1.06 trillion won. The combined revenue of the two firms would exceed the industry’s current leader Hanssem Co. that raked in about 2 trillion won in sales last year.

Hanwha L&C separated from Hanwha Advanced Materials Corp. in 2014 was sold to Morgan Stanley in the same year at 300 billion won. The company’s mainstay items are building materials such as mock marble, flooring materials, doors and windows, but its product portfolio has been recently diversified to include various interior materials such as wallpaper, furniture and mattress.

Hyundai Livart that had gone under Hyundai Department Store Group in 2012 merged with Hyundai H&S, a construction materials supplier, in December last year. Hyundai Department Store Group’s quest to take the lead in Korea’s rapidly growing home interior market also led Hyundai Livart to win an exclusive right to sell products of Williams-Sonoma Inc., U.S. retailer of home furnishings and kitchenware, in Korea last year. The furniture and interior unit also opened a 5,300-square-meter living shop after establishing a new department in charge of developing living goods.

Hyundai Home Shopping Network shares fell 4.64 percent, or 5,500 won, to finish 113,000 won on Friday in Seoul trading.

By Lee Yoo-jin and Choi Mira

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