Aramco, Malaysia's Petronas keen on Daewoo E&C stake
The 50.75% stake in South Korea's No 3 engineering firm Daewoo E&C is being put up for sale by state-owned Korea Development Bank (KDB)
Reports of yet another major merger and acquisition (M&A) in the global oil and gas industry has emerged, whereby Saudi oil giant Aramco and Malaysia’s Petronas have been named as potential bidders for a stake in South Korean engineering major Daewoo Engineering & Construction Co (Daewoo E&C).
Reuters has quoted South Korea’s Maeil Business Newspaper estimating that the deal could be worth 2tn won or $1.78bn.
The 50.75% Daewoo E&C stake is being put up for sale by state-owned Korea Development Bank (KDB), which in July said BoA Merrill Lynch and Mirae Asset Daewoo Securities have been appointed as its advisors for the deal.
Malaysian state oil company Petroliam Nasional Bhd (Petronas) is considering acquiring the KDB stake, according to Maeil, citing anonymous sources. Saudi Aramco is also interested in buying the stake, the daily has reported.
The report also mentioned that an unidentified Chinese construction firm, an unnamed US builder, the United Arab Emirates’ ADIC (Abu Dhabi Investment Council) are also in the list of entities that have expressed interest to claim a stake in Daewoo E&C.
A KDB spokesman declined a comment to Reuters on the report, but added that the notice to officially kick off the stake sale is expected to come by end of September. KDB last year said it would put up for sale stakes in its non-core units.
Daewoo E&C, South Korea’s No 3 construction firm, posted a 140% jump in H1 2017 operating profit to $412.46mn, and KDB has said it is expected to achieve positive earnings this year.
For Petronas, an acquisition of the Daewoo E&C stake would be its biggest deal since 2012 when it bought Canadian firm Progress Energy for $5.87bn.