M&A 'Deal-Guy' Who Gave Up Chuseok Holiday

M&A Giant 'Air Products' and 'SK Specialty' Sale Begins in Earnest
Trillion-Won Big Deal 'Korea Zinc Tender Offer' Draws Attention

"I am giving up this Chuseok holiday."

The CEO of private equity firm A plans to forgo this Chuseok holiday and focus on work. As trillion-won deals by private equity funds (PEFs) are concentrated around the Chuseok holiday, deal guys are busy even during the holiday.

According to the investment banking (IB) industry on the 14th, the curtain rose on the sale of Air Products Korea and SK Specialty, major industrial gas M&A deals, on the day before the Chuseok holiday, the 13th. Citigroup Global Markets Securities held a preliminary bidding for the sale of Air Products Korea on that day. The sale target is 100% of Air Products Korea's shares.

On the same day, SK Group also closed the submission of letters of intent (LOI) from potential buyers for SK Specialty. This marks the simultaneous start of the biggest 'big deal' race in this year's domestic M&A market. Currently, KKR Infrastructure and MBK Partners are actively involved in acquiring Air Products, while Han & Company and Brookfield are actively pursuing SK Specialty.

Air Products supplies industrial gases to various industries such as semiconductors, displays, and petrochemicals in Korea, with Samsung Electronics as its largest customer. SK Specialty is a profitable company that virtually monopolizes the supply to SK Hynix, an affiliate within the group. Both companies are considered valuable assets that global infrastructure funds or large PEFs would not want to miss. Both companies have long-term contracts with top semiconductor companies like Samsung Electronics and SK Hynix, making them trillion-won deals with both safety and growth potential.

Another trillion-won big deal in the M&A market is MBK's public tender offer for Korea Zinc. The tender offer amount reaches about 2 trillion won. MBK Partners' special purpose company (SPC), Korea Corporate Investment Holdings, and Korea Zinc's largest shareholder, Young Poong, will conduct a public tender offer for about 7-14.6% (1,445,036 to 3,024,881 shares) of Korea Zinc's shares from September 13 to October 4. On the 12th, MBK Partners signed a shareholder agreement with Young Poong, Young Poong advisor Jang Hyung-jin's family, and others to jointly exercise voting rights and received a call option on some shares owned by Young Poong and related parties. Through this, MBK Partners will ultimately hold one more share of Korea Zinc than Young Poong and related parties within the largest shareholder group. Currently, Young Poong and the Jang family related parties hold 33.13% of the shares. If the number of shares tendered falls short of the minimum purchase quantity, not all tendered shares will be purchased; if the target quantity is met, all will be purchased. If exceeded, only the target quantity will be purchased on a pro-rata basis.

Korea Zinc, a core affiliate of Young Poong Group, was founded by the late founders Jang Byung-hee and Choi Ki-ho. Currently, the Choi family manages Korea Zinc, while the Jang family manages Young Poong Group and its electronics affiliates. Since the appointment of Choi Yoon-beom as chairman of Korea Zinc in 2022, a competition for Korea Zinc shares between the Choi family and the Jang family of Young Poong Group has led to management conflicts. Chairman Choi reported in a large shareholder report on the 4th that he acquired an additional 26,805 shares (0.13%), holding 48.78% of the shares.