Hyundai Engineering Co., Hyundai Motor Group’s construction arm, has joined the race to buy a South Korean garbage treatment company as the group aims to develop the business as a future growth engine.
KG Group on Nov. 16 opened preliminary bidding to sell KG Eco Technology Services Co.'s (KG ETS) environmental energy and new materials businesses, according to local private equity fund industry sources. Hyundai Engineering, ECORBIT, the country’s top waste management company, and E&F Private Equity were among six or seven bidders, the sources said.
The seller was scheduled to select shortlisted bidders next week for the deal estimated at up to 1 trillion won ($847 million). EY Han Young, the Korean operation of Ernst & Young, is an advisor for the sale.
Hyundai Engineering’s move is seen as a part of its business strategy to become a global eco-friendly energy company. Hyundai Motor Group is expanding investment in environmental businesses, led by chairman Chung Euisun, given the growing importance of environmental, social and governance (ESG) management. For the goal, Hyundai Engineering is seeking the construction of eco-friendly power plants and next-generation small reactors.
A potential takeover of KG ETS will allow the company to begin an environmental business and create synergy within the group by processing garbage from its affiliates. Hyundai Engineering would be expected to expand the waste treatment business through more acquisitions.
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