Samsung Group has picked U.S.-based private equity fund Bain Capital as the preferred bidder for its 24.1 percent stake in Hanwha General Chemical Co. to complete disloading of defense business and gain fresh ammunition to proceed to reorganizing the country’s top family-run conglomerate.
Samsung C&T Co. confirmed in a regulatory filing on Thursday that it has named Bain Capital as the preferred bidder for a 24.1 percent stake held together with its sister company Samsung SDI Co. Samsung C&T and Samsung SDI own a respective stake of 20.05 percent and 4.05 percent in the former Samsung chemical unit that was acquired by Hanwha Group in 2015.
Market analysts estimate that the deal value would reach 1.1 trillion won ($1 billion), with 900 billion won expected to go to Samsung C&T and 200 billion won to Samsung SDI. Korea Investment Partners, IBK Securities PE-Stone Bridge Capital consortium and an unidentified Middle East sovereign fund were the other bidders for the stake.
Shares of Samsung C&T closed Thursday up 3.33 percent at 139,500 won, and those of Samsung SDI finished up 1.42 percent to 178,500 won.
Hanwha General Chemical went under Hanwha Group in 2015 when Samsung sold off its non-core defense and chemical units to Hanwha. The combined 24.1 percent stake has been left unsold to reduce Hanwha’s financial burden from the buyout.
Samsung plans to sign a stock purchase agreement after ironing out detailed terms of the deal. According to sources, Samsung proposed to compensate losses up to 200 billion won in case of dilution of the stock value.
Samsung selected the preferred bidder for the stakes just four months after initiating a preliminary auction with its underwriter Citi Global Markets in December 2017, amid the government’s intensified pressure on the group for restructuring. With the latest development that would later bring more than 1 trillion won capital, Samsung Group would be able to speed up its planned governance structure reform.
As part of its reform plan, Samsung C&T, the de facto holding entity of the country’s top conglomerate, is also considering selling its office building in Seocho, southern Seoul, to raise funds for the structural reform.
Having Bain Capital as its stake holder would also help Hanwha pursue more aggressive mergers and acquisitions in the global stage. The U.S. PEF has been partnered with Korean chip maker SK Hynix Inc. to join the race to acquire Toshiba’s memory chip unit.
By Han Woo-ram and Choi Mira
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