KCC completes acquisition of MomentiveA consortium led by KCC Corporation, a leading construction materials manufacturer, completed the 3.5 trillion won ($2.9 billion) acquisition of Momentive Performance Materials, a U.S.-based silicone manufacturer.
Under the deal, KCC will gain a controlling 45.5 percent stake in Momentive, the Korean firm said in a statement.
As KCC takes over the U.S. company, which is the world’s third-largest silicone producer, the combined unit will become the world’s second-largest silicone producer.
Reports related to the move first surfaced last August, but some market observers raised concerns over the completion of the deal due to the large size of capital needed for the purchase.
But KCC proceeded with the sale process and struck a sales agreement last September after forming a group of investors including SJL Partners, a private equity firm, and Wonik QnC, a local manufacturer of quartz and ceramic wares.
Global rating agency S&P, however, lowered KCC’s credit rating from BBB to BBB- due to the expected financial burden of the buyout.
The takeover is in line with KCC Chairman Chung Mong-jin’s focus on the silicone business. The chairman has hailed the business as a future growth engine.
BY PARK EUN-JEE [firstname.lastname@example.org]