South Korea’s clothing manufacturer Sae-A Trading Co. was chosen over foreign names as the candidate to buy out the country’s top boxing paper producer Tailim Packaging and its subsidiary Tailim Paper, according to a disclosure by Tailim Packaging on Tuesday.

Sae-A Trading will acquire a 71 percent stake in Tailim Packaging and 100 percent stake in Tailim Paper put up for sale by the paper maker’s largest shareholder IMM Private Equity. Market sources estimated the price would reach over 750 billion won ($629.7 million). Sae-A Trading was chosen as the preferred candidate after beating China’s Shanying Paper-Bain Capital consortium and global private equity fund Texas Pacific Group (TPG) at a main auction held last month.

IMM PE and Sae-A Trading are expected to sign a final deal next month and complete the sales around early next year. An official from IMM PE said the company picked Sae-A over the sustainability of the paper firms in the long term. The two sides will iron out detailed terms of the deal including final price. Market sources estimate the value of the two companies would reach near 1 trillion won due to the heated demand for boxing materials amid booming e-commerce and online shopping.

Sae-A Trading joined the bid to diversify its businesses to secure future growth engine, after taking over plant manufacturer STX Entech from STX Heavy Industries last year. “As part of business diversification efforts, we decided to acquire Tailim Packaging because it is the industry leader,” an official from the company said.

Founded in 1986, Sae-A Trading produces more than 2.5 million sets of clothing at 40 factories in 10 countries and supplies its products to global fashion retailers including GAP and Uniqlo. The company also has its own brands such as Trugen, Joinus and Compagna and raked in 1.77 trillion won in sales last year.

Shares of Tailim Packaging rose 2.03 percent to close Wednesday at 6,030 won in Seoul trading.

By Gwon Han-wool and Choi Mira

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