South Korea’s Honam to buy Malaysia’s Titan for RM4b
July 16, 2010
SEOUL, July 16 — South Korea’s Honam Petrochemical Corp will pay 1.52 trillion won (RM4.06 billion) to buy Malaysia’s largest petrochemical maker Titan Chemicals Corp Bhd to expand its business to South East Asia.
Seoul-based Honam will pay RM2.35 for 72 per cent of Kuala Lumpur-based Titan, a 27 per cent premium over Titan’s closing share price of RM1.85 yesterday.
Honam will buy the controlling stake in Titan largely from Malaysian government-run trusts. The remaining 28 per cent of Titan will be purchased by Honam on the stock market by November.
Honam will buy the controlling stake in Titan largely from Malaysian government-run trusts. The remaining 28 per cent of Titan will be purchased by Honam on the stock market by November.
“Through this takeover Honam will expand business in South East Asian markets and expand Titan’s production capacity,” said Lee Seung-hoon, a company spokesman.
Honam shares soared 9.4 per cent to 162,500 won as of 0538 GMT.
Honam shares soared 9.4 per cent to 162,500 won as of 0538 GMT.
Honam is 57 percent owned by South Korea’s seventh-largest business group, Lotte Group. Lotte, best known in South Korea for its department stores and supermarkets, said earlier this year it will pay US$1.2 billion (RM3.85 billion) for department and discount stores owned by GS Retail.
The Titan acquisition will boost Honam from Asia’s No. 4 petrochemical maker to its second-largest after Taiwan’s Formosa Petrochemical by boosting annual production to 2.5 million tonnes from 1.75 million tonnes.
The South Korean company makes ethylene and propylene that are used for making plastics, film and paints. Titan makes olefins and polyolefins, intermediate products for ethylene and propylene.
HSBC is the financial adviser to Honam. — Reuters
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