China’s Elion Holdings Joins Competition to Acquire Daewoo E&C

Chinese investment firm Elion Holdings, which is headquartered in Hong Kong, has participated in the competition to acquire Daewoo Engineering & Construction on December 20. Elion Holdings is highly likely to join hands with strong candidate China State Construction Engineering Corp (CSCEC), the largest construction company in China, and take part in as a financial investor (FI).

According to investment banking industry sources, Mirae Asset Daewoo, which leads the sale, held a management briefing session for CSCEC and Hoban Construction that have been shortlisted for the sale of Daewoo E&C, respectively, for two days from the 18th. Elion Holdings joined in a preliminary bid but the company failed to be chosen. However, it attended the briefing session on December18 and had a question and answer session about Daewoo E&C management. An official related to the sale of Daewoo E&C said, “The company hasn’t been shortlisted but participated in the session because it proved its additional acquisition abilities including financial conditions.”

Merrill Lynch Securities, another leader of the sale, was planning to hold a management briefing session for Chinese private equity firm Pacific Alliance Group (PAG), which is a qualified candidate for the acquisition, on December 20 but suddenly put off the session at the request of CSCEC. The industry believes that the delay is related to the fact that PAG was expected to form a consortium with CSCEC. An official from the industry said, “Briefing session delays frequently take place to have sufficient scrutiny.”

However, some say that Korea Development Bank, the largest shareholder of Daewoo E&C, is slowing down the sale process as the labor union of Daewoo E&C strongly opposes the sale. The union says that all three companies that have been shortlisted are not qualified enough to take over the company and it can stage a strike depending on a strike vote on December 19. It is planning to turn KDB officials in to the prosecution because of the process appointing Park Chang-min, former CEO of Daewoo E&C.