The South Korean industry ministry will review the proposed acquisition of the country’s leading botox maker Hugel Inc. by a multinational consortium to determine if it is consistent with retaining national core technology, according to sources on Monday.

The consortium led by local conglomerate GS Holdings Corp. signed an agreement last month to buy a majority stake in Hugel from American private equity firm Bain Capital for $1.5 billion.

However, the Korean government sees the GS-led consortium’s acquisition of Hugel as an M&A deal carried out by foreign capital because the largest shareholder of the consortium is China-based capital.

The GS-led consortium established Aphrodite Acquisition Holdings composed of GS Holdings Corp., Korean equity firm IMM Investment, Singapore-based healthcare fund CBC Group and United Arab Emirates` sovereign wealth fund Mubadala Investment to bid for Hugel’ 47 percent stake. GS and IMM together own only 27.3 percent of Aphrodite Acquisition Holdings, while CBC Group (formerly C-Bridge Capital), which is a pan-Asian biotech investment management company led by Chinese investors, and UAE’s Mubadala Investment hold 72.7 percent in total.

Korea’s Ministry of Trade, Industry and Energy is responsible for the management of the production technology of botulinum toxin preparations designated as national core technology under the law to prevent technology drain to overseas. As Hugel has maintained its leadership in the Korean botox market since 2016 with its current market share of more than 50 percent, its sale requires stricter government’s scrutiny.

If the government does not approve the acquisition, the transaction could be canceled.

By Park Chang-young and Minu Kim

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]