Mirae Asset Daewoo Securities Co. that will be newly launched following a merger with Mirae Asset Securities Co. later this month was picked by Hong Kong-based investment firm PAG to advise the PEF on its attempt to buy Daesung Industrial Gases Co. whose sale price is estimated at around 1.5 trillion won ($1.3 billion won).

According to the investment banking industry Sunday, PAG named Mirae Asset Daewoo Securities as its financial advisor for its bid for a full stake in Daesung Industrial Gases. Mirae Asset Daewoo Securities successfully secured a deal to advise PAG ahead of its official merger with Mirae Asset Securities planned at year-end. The securities firm has been seeking to bolster its investment banking business ahead of the merger and such an effort paid off with its agreement to advise PAG, marker experts said.

Shareholders of Mirae Asset Daewoo Securities and Mirae Asset Securities separately endorsed the merger of the two firms early last month, with an aim to complete the merger within this year. Once the merger is completed as planned, it would become the country’s largest securities firm with 6.7 trillion won in equity capital. The newly launched brokerage house would be named as Mirae Asset Daewoo.

The competition to buy Daesung Industrial Gases that is owned by a consortium led by global investment banker Goldman Sachs and the gas supplier’s parent Daesung Group Partners Co. with a 62 percent stake and a 38 percent stake, respectively, has heated up after about 10 contenders joined the race. Market watchers predict the gas supplier’s sale price to hover around 1.5 trillion won.

PAG is alternative investment management firm managing funds in private equity, real estate and absolute return strategies with $16 billion funds under management. Based in Hong Kong, PAG also bought Young Toys Inc, Korea’s leading toymaker famous for its hit product, transforming robot “Tobot,” at $200 million in April last year. The firm chose Swedish investment bank UBS Group AG and state-run Korea Development bank as its financial advisors for the buyout of Young Toys.

Industry watchers, however, note that private equity firms are considered relatively weak contenders in the race as the high level of debt at the industrial gas supplier would make it difficult to borrow funds.

By Kang Doo-soon and Han Woo-ram

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