Major M&A deals carried over to 2010

2010 is likely to be a hectic year for M&As, with major companies from a commercial bank to a chipmaker lining up for sale.

Shareholders and creditors, including the government, are resuming sales of the companies which were put on hold during the global financial crisis.

Shareholders of Hynix Semiconductor have restarted the sale process, sending out bidding invitations to potentially interested companies. They will receive letters of intent from them by the end of January, Korea Exchange Bank, the chipmaker`s major shareholder, said.

The sale takes place after the sole bidder for the world`s No. 2 memory chipmaker, Hyosung, pulled out of the process earlier this month. Experts put the value of the stake up for sale at around $3 billion.

Once the Hynix sale is complete, KEB is expected to start the sale of Hyundai Engineering & Construction, in which it is also a major shareholder.

Last week, state-run Korea Development Bank picked Citi to manage the sale of Daewoo Shipbuilding & Marine Engineering Co.



Daewoo Shipbuilding, the world`s third-largest shipbuilder, is expected to hit the market early next year after Hanwha Group withdrew its bid for it in January. KDB and state-run Korea Asset Management Corp. hold a combined 50.4 percent stake in Daewoo Shipbuilding.

Kumho Asiana Group is currently mulling over the selection of a preferred bidder for a controlling stake in Daewoo Engineering & Construction Co. Two foreign firms and a Middle Eastern fund submitted bids for the stake, which analysts estimated at around 3 trillion won ($2.5 billion).

The sale of a 68.8 percent stake in Daewoo International is expected to start in January, with steelmaker POSCO preparing a bid.

In the financial sector, M&A is the overriding issue already.

The Korea Exchange Bank and Woori Finance Holdings are expected to be up for grabs, the results of which will shake up the landscape of Korea`s banking sector.

On the acquirer side, the nation`s largest Kookmin Bank, the fourth-largest Hana Bank and state-run Korea Development Bank are making preparations, gauging the risk and benefit of an acquisition and securing funds.

Lone Star, a U.S. buyout fund, is seeking to sell its 51 percent stake in KEB, the sixth largest lender by asset. Analysts here say the stake could fetch as much as 6 trillion won.

The government plans to speed up the privatization of Woori Finance, the country`s second-largest financial group. It controls the firm through the state-run Korea Deposit Insurance Corp., which holds a 66 percent stake in Woori.

The KDIC recently sold a 7 percent stake in the group through a block trade, reducing its holdings to 66 percent from 73 percent. It plans to unload more shares until it holds only a controlling 50 percent stake plus one share.

The Finance Ministry said in its plan for 2010 that it will speed up privatization of Woori and consider various options regarding the disposal of the 50 percent plus one share.

(milaya@heraldm.com)

By Lee Sun-young