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SK Group eyes environmental business Conglomerate made tentative offer for EMC Holdings

Translated by Ryu Ho-joung 공개 2020-07-02 08:00:00

이 기사는 2020년 07월 02일 08:00 더벨 유료페이지에 표출된 기사입니다.

SK Group has joined a race with other bidders to buy waste company EMC Holdings, putting its faith in the growth potential of the environmental industry.

The South Korean conglomerate was on the shortlist of bidders for the Affirma Capital-owned waste management company, sources said on June 30. The final round of bidding is expected to take place before the end of July.

EMC Holdings provides comprehensive waste management services including water treatment, incineration and landfill, with its areas of operation not only in Seoul and metropolitan area but in the country’s main regions such as Chungcheong, Jeolla and Gyeongsang provinces.

SK Group’s offer for the company came after the group had showed interest in buying Korea Environment Technology (Koentec) – which is another waste processor up for sale by Macquarie – although it eventually chose not to participate in the bidding.

SK Group might have considered buying Koentec due to perceived synergies with the company which counts among its customers the group’s affiliates such as SK Energy and SKC.

SK Group is paying attention to the waste management sector because, as its peer conglomerates do, it believes that the environmental industry continues to grow amid increased environmental regulations. The acquisition of a waste company by SK Group would create synergies with many of its affiliates such as SK Engineering & Construction (SK E&C), SK Energy, SK Innovation, SKC and SK Chemicals.

Or the conglomerate may be specifically seeking to strengthen the business portfolio of SK E&C against the backdrop of a string of deals in the waste sector by domestic builders.

Mid-sized construction company IS Dongseo, in a consortium with E&F Private Equity, won a bidding war for Koentec in June after acquiring two waste companies – Insun ENT and KOLON Environment & Energy – last year. Taeyoung Engineering & Construction, which also made its offer for Koentec, acquired a smaller waste company through its subsidiary TSK Corporation to include environmental services in its business portfolio.

Industry watchers are skeptical about whether SK Group will make its final offer for EMC Holdings because that could mean it has to compete with TSK Corporation, in which stakes are held by some of its affiliates including SK E&C and SK Discovery.

But regardless of its decision on the bidding for EMC, SK Group will likely continue to consider opportunities to acquire businesses in the environmental sector, industry watchers said.

(Reporting by Hye-ran Kim)
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