Hyosung TNC to acquire Hyosung Chemical's specialty gas division for $642 million

Hyosung TNC said on the 12th that it will acquire Hyosung Chemical's specialty gas division for $642 million. The company approved the plan at a board meeting earlier in the day.

Last month, Hyosung TNC, the world's largest spandex manufacturer, received a letter of intent from Hyosung Chemical and has reviewed the acquisition.

An official from Hyosung TNC said the company decided to acquire the specialty gas division because the business has great potential to become a future growth driver. Currently, most of its earnings come from spandex production, and the company intends to diversify its portfolio to cope with uncertain market conditions and expected growth in the semiconductor industry. "Given that our main spandex business is highly sensitive to market fluctuations, we are looking for complementary businesses to reduce potential risks. We hope to create synergies by leveraging our company's global network."

Previously, IMM and STIC's bid for about 800 billion won (US$550 million) to acquire the specialty gas division ended in failure.

Hyosung Chemical's specialty gas division produces nitrogen trifluoride (NF3), a gas used to clean residues from chip and display production. The company’s gas production capacity, including NF3, reaches 8,000 tons per year.

Hyosung TNC plans to reduce the sales share of NF3, currently 80%, to 50% by 2029, while developing new products and expanding the unit’s specialty gas portfolio to 20 materials.

The company said it will hold an extraordinary shareholders’ meeting on Jan. 23, 2025 to seek approval for the acquisition plan. The acquisition is expected to be completed by the end of January. Hyosung Group, a textile-to-chemicals conglomerate, wants to keep the unit, the country’s second-largest specialty gas producer, within the group to take advantage of an eventual recovery in the chip industry, the sources said.

“We will continue to invest in the specialty gas business. Hyosung TNC aims to transform from a textile-focused company to a high-value-added materials company covering specialty gases,” said Kim Chi-hyung, CEO of Hyosung TNC.