GS ups spending to take control of botox maker Hugel

South Korea’s energy-to-retail conglomerate GS Group has increased its spending to become the largest shareholder in Hugel Inc., the country's top botox maker, according to its holding company on Friday.

GS Holdings Co. is spending a total of $251 million to take a 42% stake in a consortium that last year agreed to buy a controlling stake in Hugel from Bain Capital. With the investment, GS will secure the management rights of Hugel.

Initially, GS had planned to invest $150 million into the consortium, which includes Abu Dhabi’s sovereign investor Mubadala Investment Co., Singapore-based private equity firm CBC Group and Seoul-based IMM Investment Corp. 

Under the revised agreement, the deal size was reduced to a 43.2% stake for 1.56 trillion won ($1.3 billion) from a 46.9% stake for 1.72 trillion won. They cut the number of bonds convertible into Hugel shares by three quarters.

The deal closing was delayed to later this month, after the Ministry of Food and Drug Safety in November of last year canceled licenses on Hugel’s four botox products and ordered them to be recalled and discarded. The decision sent Hugel’s share price 20% lower as of last week.

But the Seoul Administrative Court suspended the ministry’s decision, accepting Hugel's request. Subsequently, the Seoul High Court rejected the food ministry's petition against the administrative court's ruling, clearing the way for the transaction to close.

Analysts say that the acquisition of Hugel will fast forward GS Group’s shift toward the bio sector, which the group chose as its next playing field.

Hugel recently won approval for distribution of its main botox product Letybo in Europe, including France.

It exports botox and dermal filler products to 27 countries, including Japan and Vietnam. Established in 2001, the company has more than a 50% share in South Korea’s botox market.

Last year, it posted its record operating profit of 97.1 billion won on sales of 245.2 billion won.

Write to Jun-ho Cha and Chae-Yeon Kim at chacha@hankyung.com
Yeonhee Kim edited this article