SK Construction Enters Environmental Business... Acquires EMC Holdings in a '1 Trillion Won Big Deal'

[Asia Economy Reporter Chunhee Lee] SK Engineering & Construction is entering the environmental business through the acquisition of EMC Holdings, the largest environmental waste disposal company in Korea. The transaction amount exceeds 1 trillion KRW.

According to industry sources on the 20th, SK Engineering & Construction was selected as the preferred bidder for the acquisition of EMC Holdings, the largest environmental waste disposal company in Korea, on the previous day. Apolma Capital, a private equity fund (PEF) currently holding EMC Holdings, plans to sell 100% of its EMC shares to SK Engineering & Construction at a price in the early 1 trillion KRW range through the sales agents Citi Global Markets Securities and Standard Chartered (SC) Securities.

In the main bidding held on the 7th, five major investors including Goldman Sachs' PEF group Goldman Sachs PIA and a global infrastructure fund participated. SK Engineering & Construction offered the highest price and is also reported to have had an advantage in other non-price conditions.

Through the acquisition of EMC Holdings, SK Engineering & Construction is expected to enter the environmental business and create synergy by handling waste for refining and petrochemical affiliates within the group such as SK Innovation and SK Incheon Petrochem.

SK Engineering & Construction has recently been actively promoting eco-friendly and new energy businesses through organizational restructuring. At the end of last month, it established an eco-friendly business division composed of organizations such as the Smart Green Industrial Complex Business Group and the Recycling Business Group. President Jae-hyun Ahn is directly in charge of the division and oversees the business.

EMC, established in 1997, is a comprehensive waste disposal company operating over 2,000 sewage and wastewater treatment facilities nationwide and four waste incineration plants. Apolma Capital acquired its predecessor, Kolon Water Energy, in 2016. Last year, EMC recorded sales of 380.9 billion KRW, operating profit of 45.3 billion KRW, and net profit of 22.2 billion KRW.