Hanwha Solutions starts stake sale in advanced materials division Korean firm needs money after RES France acquisition earlier this year

Translated by Kim So-in 공개 2021-10-14 08:07:16

이 기사는 2021년 10월 14일 08:02 더벨 유료페이지에 표출된 기사입니다.

Hanwha Solutions' planned sale of a stake in its advanced materials division is gaining steam, with several private equity (PE) firms conducting detailed due diligence on the target.

Hanwha Solutions hasn’t made its decision yet, but market insiders expect the deal is highly likely to be struck as the company is keen to sell its stake after its 1 trillion won ($837 million) acquisition of RES France.

Hanwha Solutions has recently started a process to split off its advanced materials division and sell an 49% stake in the new entity, industry sources said on Tuesday. The company is contacting some PE firms instead of hiring a sale manager to run an auction process.

A number of domestic major PE firms are expected to start detailed due diligence this week. Potential buyers are likely to appear as early as the second week of November given that a due diligence process normally takes four to five weeks. Some of them are reportedly so keen to acquire the stake that they establish joint ventures for the upcoming deal.

Hanwha Solutions had considered a possible sale of its advance materials division last year to improve its financial structure, but later scrapped the plan.

Analysts said the situation has changed this time as the company is in need for funds after making large-scale mergers and acquisitions (M&A) deals this year. The company agreed to buy 100% of French renewables developer RES France for about 1 trillion won in August and recently signed a 300 billion won deal with U.S. energy firm Sunbridge Energy Services to provide storage tanks for compressed natural gas (CNG).

Hanwha Group’s affiliates, including Hanwha Solutions, are expected to carry out various M&A deals especially after Hanwha Group Chairman Kim Seung-yeon revealed in his New Year's address this year a plan to increase investment in aerospace, mobility, green hydrogen and other eco-friendly businesses.

Hanwha Solutions operate five business divisions, including chemical, solar panels maker Q Cells, advanced materials, retailer Galleria, and city development. Its chemical and Q Cells divisions accounted for about half of its total revenue of 5.18 trillion won in the first half of this year. The advanced materials division posted revenue of about 237.6 billion won, accounting for about 3%-4% of total revenue.

Hanwha Solutions was formed by a merger of three companies – Hanwha Q Cells, Hanwha Chemical and Hanwha Advanced Materials – in January 2020.

“We are reviewing (a split-off and sale of the advance materials division), but nothing has been finalized,” said an official at Hanwha Solutions. (Reporting by Ha-ha Suh)
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