SK Networks Co., trading unit of South Korea’s SK Group, has become the likely new owner of Tongyang Magic Inc., a home appliances manufacturing and renting company.

According to sources from the retail and investment banking industry on Tuesday, SK Networks reportedly submitted the highest bid of over 600 billion won ($546 million), beating out other contenders including Hyundai Home Shopping Co., the AJ Networks Co.- IMM Private Equity-Keystone Private Equity consortium and Unid Co.-Stick Investment consortium that offered about 500 billion won in the main bid led by a consortium of NH Private Equity and Glenwood Private Equity. SK Networks also pledged to accept the company’s demands for job stability.

The CJ O Shopping and CVC Capital Partners bowed out of the main race.

The sources expect the official announcement on the decision to pick SK Networks as a preferred bidder to be made as early as Wednesday.

SK Networks expects a big synergy from the acquisition by combining SK Telecom’s smart home services using the Internet of Things (IoT) with Tongyang Magic’s home appliance rental services. “SK Networks’ strength in retailing and Tongyang Magic’s home appliance hardware business would create a big synergy effect,” said an official from the company.

The deal, if successful, would be the first acquisition since SKC Chairman Chey Shin-won was appointed as a CEO SK Networks. Industry watchers believed that Chey would put his utmost efforts to take over Tongyang Magic to accelerate the company’s restructuring and find a new growth engine. He recently decided to sell the fashion business to Hyundai Department Store Group.

Tongyang Magic’s financial soundness has improved significantly since it was taken over by NH and Glenwood in 2014. Its business focus has been moved from home appliance manufacturing to renting and IoT services. Its earnings before interest, taxes, depreciation and amortization (EBITDA) are estimated to reach 85 billion won this year and 100 billion won next year.

The NH-Glenwood consortium and SK Networks are expected to go straight to ink the acquisition deal by skipping due diligence process, according to the sources. If the talks go smoothly, they would be able to sign a stock purchase agreement (SPA) early next month. NH and Glenwood would reap handsome profit from the sale as the price of over 600 billion won would more than double 280 billion won that the two paid to acquire a 100 percent stake in Tongyang Magic in 2014.

By Kang Doo-soon and Kim Hyo-hye

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