By Rick Carew and Dana Mattioli
Goldman Sachs Group Inc. is shopping one of South Korea's biggest industrial-gas producers to prospective buyers in a deal that could fetch $2 billion, according to a person familiar with the situation.
The Wall Street bank, which owns a controlling stake in Daesung Industrial Gases Co., has sent out financial details of the operation to prospective buyers including private-equity firms, South Korean conglomerates and global industrial gas competitors to gauge interest in the asset, the person said. Potential buyers have been asked to make bids for the entire company, the person said.
The sale is an intriguing prospect for private-equity firms in Asia because controlling stakes in companies operating in high-margin industries are rarely put up for sale in the region. South Korean banks have also been willing to fund buyout deals in the country at high leverage ratios and cheap rates, potentially juicing returns for a buyer.
Goldman's two-year investment should reap a nice return for the Wall Street firm. A Goldman Sachs-led consortium paid $400 million to buy 68% of the industrial gas business of South Korean conglomerate Daesung Group in July 2014.
The South Korean conglomerate was forced to sell the stake in the business after it overextended itself in the construction and real-estate sectors and needed to raise cash by selling assets. Daesung Group had an option to repurchase Goldman's stake later but has decided to not exercise that and to work with Goldman toward a full sale of the business, the person said.
Daesung Industrial Gases produces oxygen and nitrogen, among other industrial and specialty gases, that are used in a wide range of industrial production processes including in the semiconductor industry and electronics. A major customer for the company is LG Display Co.
Kane Wu contributed to this article.
Write to Rick Carew at firstname.lastname@example.org and Dana Mattioli at email@example.com
(END) Dow Jones Newswires
November 24, 2016 06:03 ET (11:03 GMT)
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