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Hyosung TNC to acquire gas affiliate Hyosung Chemical for $642 million

Published: 12 Dec. 2024, 17:59 Updated: 12 Dec. 2024, 18:51

LEE JAE-LIM
[email protected]

Hyosung's headquarters in Seoul [HYOSUNG TNC]

Hyosung TNC will acquire Hyosung Chemical's specialty gas business for 920 billion won ($642.5 million), the chemical fiber affiliate said Thursday.

Hyosung TNC, which currently derives a large portion of its earnings from the manufacturing of spandex, intends to diversify its portfolio in response to uncertain market conditions and projected growth in the semiconductor sector, the company said. The acquisition is pending approval at a shareholder meeting scheduled for Jan. 23; the company aims to establish a separate subsidiary to complete the deal by the end of that month.

The company first received an acquisition proposal from Hyosung Chemical last month. Its board determined in a meeting on Thursday that the affiliate “holds potential as a future growth driver,” Hyosung TNC said.

The price of the deal was set based on an “external evaluation.” Hyosung TNC plans to fund the purchase using liquid assets such as accounts receivable.

Hyosung Chemical’s specialty gas division produces nitrogen trifluoride (NF3), a gas used to clean residue from the production of chips and displays. The company's gas production capacity, including NF3, reaches 8,000 tons annually.

Hyosung TNC plans to reduce NF3's sales share, which currently stands at 80 percent, to 50 percent by 2029, as well as to develop new products and expand the divisions specialty gas portfolio to 20 materials.

“Through continued investment in the specialty gas business, Hyosung TNC aims to evolve from a fiber-focused company into a leader in high-value materials and industrial innovation,” said Hyosung TNC CEO Kim Chi-hyung in a statement.

BY LEE JAE-LIM [[email protected]]