LX Group to buy glassmaker from Glenwood PE

South Korea’s LX Group is acquiring a local glassmaker from private equity firm Glenwood PE.

LX Group was scheduled to sign a memorandum of understanding (MOU) with Glenwood PE to buy a 100% stake in Hankuk Glass Industries Inc. (HanGlas) for about 600 billion won ($506 million) through the group’s core affiliate LX International Corp. on Dec. 24, according to investment banking industry sources.

LX Group is set to ink a formal contract in the first quarter of next year after due diligence.

The group hired IB Lazard Ltd., law firm Bae, Kim & Lee LLC and accounting firm Samjong KPMG LLC for the deal.

HanGlas, South Korea’s oldest pane maker founded in 1957, is the second-largest in the domestic industry, following KCC Glass Corp. HanGlas was hit by the 1997-98 Asian Financial Crisis and taken over by French construction materials company Saint-Gobain SA in 2005. Glenwood PE bought HanGlas for some 310 billion won in 2019.

TO ENTER ECO-FRIENDLY BUSINESSES

LX Group is seeking the acquisition in order to make inroads into eco-friendly businesses, industry sources said.

LX International is pushing forward a change in its business portfolios to replace its existing coal-related business with eco-friendly sectors. Last month, the company joined hands with SKC Co. and Daesang Corp. to build a 180 billion won factory for polybutylene adipate-co-terephthalate (PBAT) that biodegrades in nature within six months.

HanGlas produces an energy-saving glass product that maximizes the insulation effect by coating one side of the pane with silver. The company built a new melting furnace after Glenwood PE took it over to improve energy efficiency. In 2023, it is expected to cut carbon dioxide emissions by some 16% from the current level.

The acquisition is also predicted to create synergy with LX Hausys Ltd., a building materials affiliate. Cooperation with HanGlas is likely to help LX Hausys to take the lead in the window business, analysts said.

Glenwood PE is expected to reap a big profit from the investment in HanGlas, once the deal is completed. The PEF pocketed a series of investment profits of hundreds of millions of dollars with a solid reputation for specializing in carve-out deals, as noted by its previous ventures, including the acquisition of Halla Cement, formerly known as Lafarge Halla Cement, and home appliance maker Tongyang Magic.

Write to Chae-Yeon Kim at why29@hankyung.com
Jongwoo Cheon edited this article.