Hyosung TNC Acquires Hyosung Chemical Specialty Gas Division for 920 Billion Won

Hyosung TNC Co., Ltd. is acquiring the specialty gases business of Hyosung Chemical Co., Ltd. to foster it as a future growth engine.

Hyosung TNC announced on the 12th that it held a board meeting and decided to acquire the specialty gases business division of Hyosung Chemical. After receiving a letter of intent for acquisition from Hyosung Chemical in mid-November and reviewing the business feasibility, Hyosung TNC judged that the specialty gases business holds sufficient potential as a future growth engine.

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Through an appropriate evaluation by an external institution, the acquisition price was set at a total of 920 billion KRW. Hyosung TNC plans to secure acquisition funds by utilizing liquid assets such as accounts receivable it currently holds.

Hyosung TNC plans to hold an extraordinary general meeting of shareholders on January 23 next year to approve the acquisition agenda. Subsequently, it will finalize the acquisition process by signing a business transfer contract for the specialty gases division of Hyosung Chemical and establishing a subsidiary (tentatively named Hyosung Neochem). The final acquisition is expected to be completed by the end of January next year at the earliest.

This acquisition decision is based on a management diagnosis that discovering future growth engines is necessary for Hyosung TNC to secure growth potential going forward. Hyosung TNC’s spandex division has served as a cash cow for several years, based on its global number one position. However, due to the potential risk of being sensitive to industry changes, Hyosung TNC has continuously reviewed new growth engines with high growth potential.

Hyosung TNC judged that the specialty gases business has sufficient business feasibility because ▲ it is expected to expand profits due to the upcycle transition and growth of the semiconductor market, ▲ it is a sound business that has achieved approximately 56.5 billion KRW in EBITDA over the past three years, ▲ there will be significant synergy effects by utilizing Hyosung TNC’s specialty gases business and global network, and ▲ it can diversify the business portfolio to disperse risks in an uncertain future management environment.

Furthermore, by adding the high-growth and profitable specialty gases division to its business portfolio alongside the spandex fiber division, it is expected to take a step forward as a high value-added materials specialized company.

Hyosung Chemical’s specialty gases business, which began producing nitrogen trifluoride (NF3) in 2007, currently has a production capacity of 8,000 tons per year at facilities in Ulsan and Oksan, Chungbuk. In addition to NF3, it produces a total of six types of specialty gases including F2/N2, Cl2, D2, C4F7N, and HCl, thereby establishing a stable business portfolio.

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