South Korea’s Hanwha Group is considering bidding for a 100 percent stake in Continental Structural Plastics Inc. (CSP), U.S. manufacturer of auto parts and lightweight composite materials, as part of its efforts to expand its auto parts business by making inroads into the U.S. car materials market.

According to the investment banking industry on Monday, Hanwha recently sent a formal letter to the U.S. company to express intent in buying an entire stake in the firm, a deal that is estimated at around $600 million.

Founded in 1969 in Michigan, the U.S. company manufactures lightweight composite materials and car panels, and provides them to leading American automakers such as General Motors Co., Ford Motor Co. and FCA US LLC - the North American unit of Fiat Chrysler Automobiles N.V. Its sales reached $550 million last year, and it runs 15 branches in four countries such as the U.S., Mexico, China and France.

The world’s largest chemical producer BASF SE, headquartered in Germany, and Japanese Mitsubishi Group, also purportedly have a keen interest in buying CSP.

CSP is expected to select a preferred bidder in August after it completes receiving offers from bidders this week. The industry observes that Hanwha makes an eligible candidate as it has ample cash reserves of 800 billion won ($674.5 million) after it recently shed non-core businesses.

The latest bid by Hanwha, which already supplies lightweight auto parts via its unit Hanwha Advanced Material Corp., underscores the group’s ambition to not only enter the U.S. market, but also to nurture the auto parts business as its next-generation growth engine.

The South Korean conglomerate acquired a 57.6% stake in Samsung General Chemicals Co. last year, which allowed its petrochemical business to get a huge boost in terms of economies of scale. Since then, it has been seeking to improve profitability by growing high-value added auto parts business. Last year, Hanwha acquired Heycoustics GmbH, German car component supplier to luxury carmakers such as BMW and Audi AG, last year.

By Chung Wook and Kim Jung-hwan

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