Lotte Chemical acquires Iljin Materials, a maker of copper foil, a key material for rechargeable batteries. It is the first large-scale merger and acquisition (M&A) to be carried out after it announced its entry into the electric vehicle materials field. With the acquisition of Iljin Materials, Lotte Chemical plans to take a step forward as a global electric vehicle materials company.
According to the investment banking (IB) industry on the 27th, Lotte Chemical plans to sign a stock purchase agreement (SPA) to acquire Iljin Materials as early as this week. The target of the acquisition is a 53.3% stake owned by Iljin Materials President Huh Jae-myung. Lotte Chemical has been negotiating with Iljin Materials by participating in the bidding held on the 19th of last month virtually alone.
The acquisition price is said to be between 2.5 trillion won and 2.7 trillion won. As of today’s closing price, the market cap of Iljin Materials is 2.62 trillion won. This is the price that provides an 80-90% premium for management rights to the market value of 53.3% of the stake to be acquired (1.4 trillion won). The sale was handled by Citi Global Market Securities.
After acquiring Iljin Materials, Lotte Chemical plans to expand its copper foil business in earnest. Industry insiders predict that Lotte Chemical will invest 2 trillion to 3 trillion won to expand copper foil production facilities after acquiring Iljin Materials. Currently, in the global copper foil market, Iljin Materials ranks fourth with a 13% share. In Korea, it is the second largest company behind SK Nexilis (with a global market share of 22%). An official familiar with the deal said, “Negotiations are in progress, but there are still many difficulties to be solved, so we have to wait until the end.”
Reporter Chaeyeon Kim/ Junho Cha [email protected]