SK, Haier, Caryle, Bain shortlisted for Woongjin Coway acquisition

2019.08.06 12:37:01 | 2019.08.06 12:50:41

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South Korea’s SK Networks, China’s electronics maker Haier and two U.S. funds have been shortlisted to compete for Korea’s top home appliance rental company Woongjin Coway Co., whose sales is estimated at around 2 trillion won ($1.65 billion).

According to sources from the investment banking (IB) industry on Monday, its sales advisor Korea Investment & Securities Co. shortlisted four bidders – SK Networks Co. that owns a home appliance rental service subsidiary SK Magic, China’s consumer electronics maker Haier, American private equity fund Carlyle Group and Bain Capital – among six that submitted preliminary bids last week.

Up for sale is a 25.08 percent stake plus management right in Woongjin Coway owned by the nation’s mid-tier conglomerate Woongjin Group. The shortlisted candidates will have about a month to conduct due diligence before submitting final bids in September. The seller aims to complete the sale within this year.

Market experts believe the competition over the country’s top water purifier rental company would heat up after the firm reported robust income and financial statements. Woongjin Coway that posted a record high operating profit of 273.4 billion won on sales of 1.46 trillion won during the January to June period this year has maintained the number one position in the local home appliance rental service market since it entered the industry for the first time in 1999.

SK Networks, the trading unit of SK Group, has been bolstering its rental business since it entered the industry by taking over Tongyang Magic, a kitchen appliance maker and renter, and renaming it SK Magic in 2016. SK Magic has been a leader in the local gas range market and in competition with Woongjin Coway in the rental service market.

The Qingdao-based consumer electronics maker Haier joined the previous race in partnership with CJ Group in 2015 when the then Coway owner MBK Partners had placed Coway on sale, but the deal fell through. The company is said to have strong interest in the Korean electronics rental company in an attempt to strengthen its business not only in Korea but also in Southeast Asia.

Woongjin Group decided to sell the cash-cow unit just three months after it brought it back under its arm from MBK Partners amid financial struggles stemming from its solar cell unit Woongjin Energy that is under court receivership. A local credit rating agency downgraded the group’s holding entity Woongjin amidst latest financial woes.

By Jin Young-tae and Choi Mira

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