Union, affiliate of South Korea’s leading polysilicon manufacturer OCI Co., will acquire a 52.17 percent stake in Ssangyong Materials Corp. at 80 billion won ($ 66.6 million), the company said in a regulatory filing on Thursday.

The company plans to use own funds as well as loans from financial institutions to buy 21,910,820 shares of Ssangyong Materials at 80 billion won, with an aim to complete the deal on 14 March, 2017, according to the company. The deal price is close to Ssangyong Materials’ market value which is 76.7 billion won based on its shares’ closing price of 3,500 won a piece on Thursday. In general, the largest shareholders` equity is traded at 30 percent higher than the market value with management premium.

Shares of Ssangyong Materials plunged 8.3 percent, or 290 won, to 3,210 won in Seoul trading Friday.

Union that manufactures special cement and supplies rare metals has not been regarded as a strong contender in the bidding race that was expected to be mainly led by its bigger rivals SKC and KCC. But SKC, KCC and Iljin Materials pulled out of the race after the heated completion drawing more than 10 bidders pushed up the deal value, leaving only two competitors including Union. In the final race, the Union beat Kukdong Oil& Chemicals Co. to become the winner.

Ssangyong Materials, a lucrative auto parts making subsidiary of Ssangyong Cement, commands 11 percent in the global motor magnet market, and 35 to 40 percent in the local market. Its parent company Ssangyong Cement, the country’s leading cement maker, has decided to sell off Ssangyong Materials along with other subsidiaries to focus more on its core cement business since it was acquired by private equity investment firm Hahn & Company last year.

By Chun Gyung-woon

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