SEOUL, March 30 (Korea Bizwire) – Hanwha Techwin Corp., a defense unit of major South Korean business group Hanwha, is set to take over a defense affiliate under power and construction equipment conglomerate Doosan, for 700 billion won (US$600 million), industry sources said Wednesday.
Hanwha Techwin was picked as the preferred bidder for Doosan DST, beating out another defense company LIG Nex 1. The two are in talks to narrow the differences on the price tag, the sources said.
The planned acquisition of Doosan DST, a manufacturer of armored vehicles and guided missile launchers, is expected to create huge synergies for Hanwha Techwin, which produces the K9 Thunder, a self-propelled 155 mm howitzer, said the sources.
Doosan DST is 51 percent owned by Doosan’s affiliates while the remaining is held by strategic investors.
The company posted an operating income of 41 billion won on sales of 693 billion won last year.’
The Doosan Group, a South Korean machinery and power equipment conglomerate, is seeking to speed up the sale of core assets in a bid to improve its financial footing.
Doosan Infracore Co., the group’s construction equipment maker, has reached an agreement to sell its machine tool business unit to local private equity fund MBK Partners for 1.13 trillion won.
The company also plans to list its unit Doosan Bobcat Co. on the local bourse in a bid to improve its financial health. Doosan Infracore took over Doosan Bobcat in 2007 from Caterpillar for $4.9 billion won.
Last month, the Doosan Group also sold its stake in Korea Aerospace Industries Ltd. for some 300 billion won, the proceeds of which will be used to beef up its financial status.