Skip to content
  • KOSPI 2728.47 +8.08 +0.30%
  • KOSDAQ 898.14 +8.70 +0.98%
  • KOSPI200 363.06 +0.67 +0.18%
  • USD/KRW 1197.8 3.60 0.30%
  • JPY100/KRW 1,051.62 4.12 0.39%
  • EUR/KRW 1,353.87 1.20 0.09%
  • CNH/KRW 189.1 0.67 0.35%
View Market Snapshot
Doosan Group

Doosan Group inks sale of copper foil maker to PEF SkyLake for $588 mn

By Sep 04, 2020 (Gmt+09:00)

Doosan Group has agreed to sell Doosan Solus Co. Ltd., a copper foil and OLED materials maker, to South Korean private equity firm SkyLake Investment Co., according to the companies' regulatory filings on September 4.

The South Korean conglomerate will unload a 53% stake in Solus, held collectively by Doosan Co. Ltd., group Chairman Park Jeong-won, and other stakeholders. The stake is valued at around 700 billion won ($588 million), based on the company's enterprise value of 1.32 trillion won. SkyLake is expected to finance the deal by pulling in capital from its new blind-pool fund, as well as from co-investors.

Doosan Group and SkyLake were in talks for almost a year before reaching an agreement. The two parties first began discussions at the end of 2019, with SkyLake conducting on-site due diligence into the group’s Hungary-based facilities earlier this year despite the spreading of the coronavirus.

But the deal was scrapped and Solus was back on the market after Doosan Group expressed the need to deliberate further.

Korean conglomerates, including Lotte Group and LG Group, along with private equity firms such as KKR & Co., Carlyle Group, and TPG, had shown interest but failed to get the nod from the Doosan Group, leaving the deal on the table for SkyLake.

The unloading of Solus will facilitate Doosan Group’s restructuring process promised to creditors. The group has been selling its core assets in return for a 3 trillion won state bailout to keep cash-strapped Doosan Heavy Industries & Construction Co. afloat.

Following Solus’ sale, the group is expected to shift its focus to Doosan Infracore, which looks set to sell by year-end. The market is paying close attention to whether profitable affiliate Doosan Bobcat will also be up for sale.

Copper foil used in electronic equipment  (Courtesy of Doosan Solus)



Battery copper foil offers high growth potential, key to why SkyLake did not abandon the deal in spite of hiccups.

The battery copper foil market is expected to grow 40% a year on average between 2018 to 2025, surging from 75,000t worth 1 trillion won to 975,000t worth 14.3 trillion won, according to market research firm SNE Research.

Solus’ Hungary-based facility produces an annual 10,000t of battery copper foil, and the company plans to increase this to 25,000t by 2022 and 50,000t by 2025.

SkyLake is expected to commit at least 300 billion won into the battery copper foil operation post-acquisition to fund its expansion.

Solus is a latecomer to the copper foil industry compared to rivals such as SK Nexilis and Iljin Materials Co. that produce between 30,000t and 50,000t annually. The competitors, however, have production bases in Korea and Southeast Asia whereas Solus has the geographical edge as it manufactures in Europe, near the battery plants of LG Chem Ltd., Samsung SDI Co., and SK Innovation Co.

Another entry barrier into Europe is that the EU has fortified its Reduction of Hazardous Substances regulations, which restricts hexavalent chromium Cr6+, a substance formed in the battery copper foil coating process.

Even if industry rivals attempt to move into the European market, it would take two to three years to begin new operations.

OLED materials used in televisions (Courtesy of Doosan Solus)



Solus’ OLED materials business also drew attention as it is one of the strongest in Korea thanks to its hole block layer (HBL) and capping layer (CPL) technologies. The company's OLED business would add value to companies looking to boost their secondary battery-related portfolios.

However, the company's robust OLED business is also why strategic investors such as LG Group did not step in during the public sale. Solus’ OLED business revenue stems mostly from Samsung Display and Samsung Electronics, which are in competition with LG in the OLED sector.

Since Solus is an exclusive supplier of CPL for Samsung Electronics’ flagship smartphones, such as the Galaxy Series, the company would likely have seen a drastic drop in Samsung revenue if LG Group took over.

For these reasons, SkyLake may tap Korean chemical companies, including LG Chem and Lotte Chemical Corp., to buy part of its Solus stake to boost its enterprise value.

LG Chem is the world's top electric vehicle battery maker and Lotte Chemical is focusing on future mobility materials. Hanwha Group is also looking to tap into the chemical materials sector. A Solus stake may help them secure stable supply while increasing the chance of a profitable exit for SkyLake.

This is the biggest M&A deal to date for the local PEF, led by ex-Information and Communication Minister and Samsung Electronics Digital Media President Chin Dae-je, since SkyLake's inception in 2006.

Write to Jun Ho Cha and Chae-Yeon Kim at

Danbee Lee edited this article

Comment 0