BGF buys out KNW to take direct control of semiconductor materials arm
What's the deal? South Korea's BGF GroupDealroom has a profile for this one. Try Dealroom → will acquire the entire 56.9% stake in KNWDealroom has a profile for this one. Try Dealroom → held by its subsidiary BGFecomaterialsDealroom has a profile for this one. Try Dealroom →, making the semiconductor materials firm a direct subsidiary of the holding company. BGFDealroom has a profile for this one. Try Dealroom → announced the deal on October 7, covering all 9,113,891 KNW ordinary shares. The deal value was not disclosed.
Why now? Under the old equity structure, restrictions under the Fair Trade Act limited KNW's investment decisions and external funding. By integrating KNW as a direct subsidiary, BGF expects to decide facility investments and funding quickly, based on market conditions.
What's the endgame? The deal simplifies BGF's governance from four tiers to three, moving KNW up from a grandchild company to a direct subsidiary. It concentrates the group on three sectors: BGF RetailDealroom has a profile for this one. Try Dealroom →'s distribution, BGFecomaterials' engineering plastics, and KNW's semiconductor materials.
BGF plans to accelerate investment and decision-making in semiconductor materials, where it cites a need for large-scale spending on quality, production stability, and facility expansion. KNW's subsidiary, BGF EcospetialtyDealroom has a profile for this one. Try Dealroom →, makes specialty gases for semiconductors. In September, it completed a hydrofluoric acid plant in Ulsan's Onsan National Industrial Complex with annual capacity of roughly 50,000 tons — half of South Korea's domestic demand.
What changes for BGFecomaterials? It plans to use proceeds from the KNW sale to strengthen its engineering plastics business, repay variable-interest loans early, and improve its financial structure. The company is also weighing a tender offer, and will cancel all 842,699 treasury shares — about 1.3% of issued stock — by next month.
The signal: The restructuring reflects a push to centralise control over a strategically sensitive supply chain. "This governance restructuring will establish a foundation to strategically nurture future growth engines and maximize the capabilities of all business units under a responsible management system," a BGF official said.
Read more: chosun.com
