A consortium led by South Korean construction materials maker KCC Corporation is looking at acquiring Momentive Performance Materials, a US-based silicone manufacturer, in a deal that could be valued at US$1.8 billion, according to a report in a local South Korean daily.
KCC has been quoted as saying that it is looking into different strategic directions including the acquisition, with details to be announced in a month.
Local media outlets reported that the consortium consists of Wonik, a medium-sized semiconductor materials producer for the electronics industry, and SJL Partners, a local private equity firm.
Together with Momentive, which is the world’s third largest silicone producer, the combined unit could become the world’s second largest silicone producer.
The move appears to be linked with KCC Chairman Chung Mong-jin’s focus on the silicone business, hailing it as a future growth engine. The potential takeover would also help KCC expand in overseas markets.
In 2003, the group succeeded in developing technology to commercially produce organic silicon for the first time in Korea, ranking as just the fifth company in the world to accomplish the feat. Organic silicon – which is made of resin, oil and rubber – is expected to substitute for petrochemical products in the future.
KCC offers different materials businesses ranging from glass, adhesives, plasterboard and paints for the building, automotive, shipping and window frame sectors.
Established in 2006, Momentive is one of the world’s largest producers of silicones and silicone derivatives and a global leader in the development and manufacture of products derived from quartz and specialty ceramics. For the first quarter this year, it generated net sales of US$657 million, a 21% increase year-over-year. The company said results were driven by strong end-market demand across its entire portfolio, particularly in personal care, automotive and electronic end markets.