South Korean cement producer Halla Cement Corp. returns to the M&A market just a year after it was sold to Hong Kong-based Baring Private Equity Asia, inviting preliminary bidders by Sept. 12.

According to multiple sources from the investment bank industry on Tuesday, the cement producer’s sales advisor Citigroup Global Market Securities Korea plans to receive letters of intent from potential buyers of Halla Cement on September 12. Final bids would be received in October after allowing four weeks of due diligence before a preferred bidder can be named. Baring PEF is reportedly seeking from 600 to 800 billion won for the company, which last year was up for grabs by LafargeHolcim Ltd. for around 550 billion won.

Baring PEA bought the cement maker in April last year, but decided to offload the company during its business peak.

Last year, Halla Cement raised 62.8 billion won in operating income, up 43 percent from 43.8 billion won a year ago. Industry sources note that Baring PEA is rushing to sell Halla Cement in fear of slowdown in the country’s property market after recent boom.

Asia Cement Co. and Rutter Associates Private Equity have expressed interest in the bid. Other strategic investors could pool in financial investors to join the race.

Korea’s leading private equity Hahn & Company that owns Ssangyong Cement Industrial Co. is also considered a potential bidder in the upcoming auction. Sources note that it could merge Ssangyong Cement Industrial and Halla Cement to create a dominant industry player to increase corporate value before re-selling it in the market. Hahn & Company had also formed a consortium with Ssangyong Cement Industrial previously to push for a merger with Hyundai Cement.

The offering also could grab attention from overseas PEFs as the M&A pipeline from Korea has been dry.

By Kang Doo-soon and Chun Gyung-woon

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