Forms a Consortium with KDB Investment
Hyundai Heavy Industries Group is seeking to acquire Doosan Infracore, the construction machinery-making unit of Doosan Group, to become a major player in the global construction equipment market.
Hyundai Heavy Industries Holdings Co. (HHIH), the shipbuilding group’s holding company, submitted a bid for a controlling stake in Doosan Infracore in a preliminary tender held on Sept. 28.
Doosan Group has put up for sale the 36 percent stake in Doosan Infracore held by Doosan Heavy Industries & Construction Co., which is valued at up to US$850 million.
The participants in the preliminary tender included MBK Partners, one of the largest private equity funds in Asia with 27 trillion won worth of assets under management, and Glenwood Private Equity, another South Korea-based private equity fund.
HHIH is regarded as the strongest bidder as it has formed a consortium with KDB Investment, the investment arm of the state-run Korea Development Bank (KDB).
KDB is engaged in the restructuring of Doosan Group, which is selling off valuable assets to raise 3 trillion won needed to keep debt-ridden Doosan Heavy Industries & Construction afloat. Having secured KDB’s investment arm as a financial investor, HHIH can expect KDB’s support in taking over Doosan Infracore.
Hyundai Heavy Industries Group has an affiliate, Hyundai Construction Equipment Co., which competes with Doosan Infracore in the construction equipment market.
MBK Partners is also a strong candidate as it is armed with 8 trillion won raised in its fifth blind pool fund this year. In 2016, it acquired Doosan Infracore’s machine tools business.
Doosan Group is expected to announce soon the short list of the bidders who are qualified to participate in the main tender.