Focusing on Core Business
Dow Chemical, a multinational chemical company, is selling its stake in SKC Haas Display Films which produces liquid crystal displays (LCDs).
According to investment banking industry sources on Feb. 8, Dow Chemical has selected NH Investment & Securities as the lead manager for the sale and is proceeding the sale of its 51 percent stake in SKC Haas. The expected amount of the deal is estimated at around 100 billion to 150 billion won (US$87.26 million to 130.89 million).
SKC Haas manufactures optical films for LCDs and highly functional films and optical filers that are used in TVs, computers, tablets, PCs and cellphones. The company was established in 2007 as a joint venture between SKC and Rohm and Haas Co. SKC spun off its display materials business division and invested in kind, while Rohm and Haas invested 180 billion won (US$157.07 million) through a paid-in capital increase. After Dow Chemical acquired Rohm and Haas in 2009, the joint venture partner changed to Dow Chemical.
The reasons why Dow Chemical sells the stake are the company is getting rid of its non-core business after the merger with DuPont and suffering from lower profits of SKC Haas. Due to the worsening display market conditions, SKC Haas continuously showed losses until the third quarter last year when the company withdrew from the business.
SKC is highly likely to buy the stake in SKC Haas owned by Dow Chemical as of now. Some competitors, including Toray, and private equity fund (PEF) investors are showing interest in the sale but SKC is expected to maintain the management rights as it is already attached to the film business. Starting from last year, SKC completed restructuring in the polyester (PET) film business in order to improve the structure of the film sector. In addition, the company changed its directors of the division and the headquarters early this year. However, products for LCDs are changing to organic light-emitting diode (OLED) and the business areas of SKC Haas is being reduced. These can be variables of the deal.