KCC has decided to purchase Momentive Performance Materials (Momentive), a global silicon manufacturer in the U.S.
The acquisition amount is $3 billion, the third largest after Samsung Electronics' Harman acquisition ($8 billion) and Doosan Infracore's Bobcat acquisition ($4.9 billion) among Korean companies' overseas M&A deals. With this acquisition, KCC is poised to become the world's second-largest company in terms of production of silicon.
KCC signed a main contract for the acquisition on Sept. 13 with attendance of major executives, including KCC Chairman Chung Mong-jin, SJL Partners CEO Lim Seok-jeong, Momentive CEO Jack Boss, and Bradley Bell, the chairman of the board of directors.
Momentive is considered as one of the world's top three silicon companies along with Dow DuPont of the U.S. and Barker of Germany. Last year's sales reached $2.31 billion. It has a total of 24 plants, including 16 silicon plants, in major parts of the world, including the United States, Europe, and China.
Silicon businesses that account for most of the Momentive's sales are run by KCC and other Quartz businesses are operated by Won Ik QnC. SJL Partners will own half of each company's shares.
Once this acquisition is completed, KCC will quickly become the world's second largest company in global silicon markets. Annual sales are expected to exceed 6 trillion won, over two times the 3.8 trillion won in 2017 on the basis of connectivity. It is also expected that KCC Group's total sales will surpass 8 trillion win from 5.7 trillion won in 2017.
With the acquisition, the company will be equipped with a comprehensive range of building and interior matrials such as paint, glass, flooring, and windowing, centering on silicon. KCC plans to expand its business portfolio to high value-added areas such as high-tech materials.
"Momentive has a long history of about 80 years, so its accumulated technology development capabilities are the best in the world," said a KCC official.
"We are planning to speed up development of new products that can generate high value added such as functional additives and strengthen global competitiveness by expanding our arenas to big markets such as the U.S., China, and Europe," he added.