Ssangyong Motor Acquisition Narrowed Down to a Three-Way Battle Among KG, Ssangbangwool, and Pavilion

Preliminary Inspection Starting Tomorrow

[Image source=Yonhap News]

[Asia Economy Reporter Seongpil Cho] KG Group, Ssangbangwool Group, and Pavilion PE have officially participated in the re-sale process to select the prospective acquirer of Ssangyong Motor.

According to industry sources on the 18th, EY Han Young Accounting Corporation, the sales agent for Ssangyong Motor, closed the submission of letters of intent (LOI) for acquiring Ssangyong Motor on the same day. KG Group, Ssangbangwool Group, and Pavilion PE, who had previously submitted preliminary LOIs, all submitted formal LOIs, narrowing the acquisition battle down to three parties. After the M&A (merger and acquisition) with the Edison Motors consortium fell through, Ssangyong Motor is pursuing re-sale through a "Stalking Horse" method, which involves signing a conditional investment contract with a prospective acquirer and then confirming the acquirer through a public bidding process. The companies that submitted LOIs plan to conduct due diligence on Ssangyong Motor from the 19th of this month until the 4th of next month, after which they will decide whether to proceed with the final bidding. Ssangyong Motor plans to receive conditional acquisition proposals by mid-next month, review them, and select a conditional acquirer. Subsequently, a final bidding will be conducted to confirm the ultimate acquirer.

KG Group plans to form a consortium with the private equity fund Cactus Private Equity (PE), which partnered with them during the acquisition of Dongbu Steel in 2019. Its affiliate, KG Steel Holdings, submitted the LOI as the representative. It is evaluated to have stronger financial power compared to other acquisition candidates. Ssangbangwool Group submitted an LOI through a consortium formed by its special-purpose vehicle manufacturer affiliate, Kwanglim, and KH Philux. Although KB Securities withdrew its plan to participate in financing for the Ssangyong Motor acquisition, Ssangbangwool Group maintains that there is no problem with funding. Pavilion PE, a private equity fund, had entered the acquisition race last year by forming a consortium with the electric vehicle company EL B&T but was outbid by the Edison Motors consortium. This time, Pavilion PE plans to join forces with financial institutions and automobile-related companies to acquire Ssangyong Motor.