Consortium led by KCC may buy U.S. silicone firm

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Consortium led by KCC may buy U.S. silicone firm

A consortium led by KCC Corporation, a leading construction materials manufacturer, is considering acquiring Momentive Performance Materials, a U.S.-based silicone manufacturer, a deal that could be valued at 2 trillion won ($1.8 billion).

But KCC said Tuesday that nothing has been decided yet.

“[KCC ] is looking into different strategic directions including the acquisition, but we haven’t yet decided,” said the company in an electronic disclosure, adding that it will announce details in a month once a decision is made.

Multiple local media outlets reported that the consortium consists of Wonik, a medium-sized semiconductor materials producer for the electronics industry, and SJL Partners, a local private equity firm.

If KCC takes over the U.S. company, which is the world’s third largest silicone producer, the combined unit could become the world’s second largest silicone producer.

KCC’s investors cheered the news and shares in the company jumped 3.67 percent on Tuesday compared to the previous trading day.

The move appears to be linked with KCC Chairman Chung Mong-jin’s focus on the silicone business, hailing it as a future growth engine. The potential takeover would also help KCC expand in overseas market, a key goal proposed by Chairman Chung in a New Year’s message this year.

In 2003, the group succeeded in developing technology to commercially produce organic silicon for the first time in Korea, ranking as just the fifth company in the world to accomplish the feat. Organic silicon - which is made of resin, oil and rubber - is expected to substitute for petrochemical products in the future.

KCC has different materials businesses ranging from glass, adhesives, plasterboard and paints used on buildings, automobiles, ships and window frames.

The materials producer holds the top position in Korea in the paint and plasterboard markets. It offers a wide range of silicone-based materials.

Started in December 2006, Momentive is a leading producer of high-performance resins, silicones, and other advanced materials. The manufacturer supplies several industries with its materials.


BY PARK EUN-JEE [park.eunjee@joongang.co.kr]

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