Global industrial gas company Air Products has canceled the sale of its Korean subsidiary, Air Products Korea. The Korean unit had recently completed a preliminary bidding process and was poised to finalize a shortlist of potential buyers when it abruptly halted the sale. This decision is believed to stem from the suspension of construction for Samsung Electronics’ Pyeongtaek Campus plant 5 (P5), where Air Products Korea was set to supply gas. The company’s performance outlook has been sharply downgraded, necessitating a reevaluation of its M&A plans.
According to investment banking sources on Oct. 7, Citigroup Global Markets, the sale manager, recently informed potential buyers of the cancellation. The sale involved the full management stake in Air Products Korea, divided among its U.S. headquarters (33.9%), its subsidiary Air Products Manufacturing Corporation (24.51%), and Air Products International LLC (41.63%).
The preliminary bidding, which concluded on Sept. 13, attracted interest from domestic private equity firm MBK Partners, as well as global firms KKR and Carlyle Group, along with others like Stonepeak and I Squared Capital. As one of the largest deals to surface in the domestic M&A market in some time, it drew strong interest from major private equity firms both locally and globally.
The market had previously estimated Air Products Korea’s sale price at nearly 5 trillion won, based on last year’s EBITDA of 232.8 billion won and its selection as a gas supplier for Samsung’s P5 project. Air Products Korea was expected to generate an additional 75 billion won in annual EBITDA from the P5 deal. Multiplying this by roughly 16 times last year’s EBITDA led to the 5 trillion won valuation.
However, with the recent suspension of equipment orders for Samsung’s P5 and no clear timeline for resumption, the sale process was disrupted. With gas equipment installation for Samsung’s P5 semiconductor line no longer viable, Air Products Korea can no longer factor in the additional 75 billion won in EBITDA, dropping its potential valuation to around 3.7 trillion won based on last year’s numbers.
