BASF, ADM join race to buy Korean ceramide maker Solus Biotech

BASF SE, the world’s largest chemical producer, US food processing giant ADM Co. and two other global companies have joined the race to acquire South Korean biomaterial maker Solus Biotech, according to investment banking sources on Dec. 26.

Korean private equity firm Skylake Investment Co. held a bid on Dec. 23 to sell a 100% stake in Solus Biotech, under copper foil maker Solus Advanced Materials Co. Four bidders, BASF, ADM, Belgian chemicals firm Solvay S.A. and German chemicals producer Evonik Industries AG, participated in the bidding.

Solus Advanced Materials expects the deal value to be around 400 billion won ($314.6 million), sources said.

Skylake Investment, led by ex-president of Samsung's digital media business and former information and communication minister Chin Dae-je, acquired a 52.9% stake in Solus Advanced Materials from heavy industries and construction conglomerate Doosan Group for 698.6 billion won in December 2020. Lotte Fine Chemical Co., a unit under Lotte Group, injected 290 billion won in the fund as a strategic investor at the time.

In the following year, Skylake split off the copper foil maker's biomaterial unit, which later became Solus Biotech.

The PE firm has been in talks with potential bidders since early this year. Among the companies interested in the deal during the first half of this year was Lotte Group, according to local media. Lotte is accelerating biologics contract development and manufacturing organization (CDMO) as a future growth engine.

Solus Advanced Materials is expected to strengthen its copper foil and electric foil production via the sale of its 100% subsidiary.

Solus Biotech produces cosmeceutical, pharmaceutical and nutraceutical ingredients. One of its major products is natural ceramide with more than 95% purity, which is made through yeast fermentation.

The Korean biomaterial company dominates the Korean ceramide market. It supplies the ingredient to global cosmetics group L’Oreal.

(Updates with the bidders' list: BASF SE didn't participated in the bid, The Korea Economic Daily found on Dec. 28 after this report. ADM, Solvay, Evonik Industries and UK chemical manufacturer Croda joined the bid.)

Write to Jun-Ho Cha at chacha@hankyung.com
Jihyun Kim edited this article.