Acquisition financing talks for Doosan Group’s planned takeover of SK Siltron, a semiconductor wafer manufacturer, have been completely suspended, according to confirmation. The development follows stalled sale negotiations between the two sides, and cautious forecasts have emerged in the market that meeting the deal terms may not be easy.
According to financial circles on Tuesday, the 2.5 trillion won acquisition financing that Korea Development Bank and Woori Bank had agreed to provide to Doosan Group has been completely halted as SK Group reconsiders the sale of SK Siltron. With the equity value of a 100% stake in SK Siltron (SK Inc. 70.6%, Chairman Tae-won Choi 29.4%) estimated at approximately 5 trillion won, Doosan had agreed to raise 2.5 trillion won of that amount through acquisition financing.
A senior financial industry official familiar with the matter said, “The contract between the two companies has not completely fallen apart,” while explaining that “it is true that the two sides intended to sign the contract but were unable to do so.” Another official involved in the acquisition financing said, “Since the talks were suspended, we have not received any communication from either SK or Doosan.”
SK Group selected Doosan as the preferred bidder in December last year as it pursued the sale of SK Siltron to restructure the group’s businesses. However, the talks were abruptly suspended ahead of the final share purchase agreement (SPA) signing on the 28th of last month. In a re-disclosure regarding the SK Siltron sale on Monday, SK said only that “detailed matters will be decided through consultation with the preferred bidder.”
The business community’s analysis points first to a disagreement over price. As the importance of wafers, one of the basic materials, has grown amid the super cycle in artificial intelligence (AI) memory semiconductors, a disagreement over valuation arose.
Within SK Group, voices have reportedly called for reassessing the strategic value increase stemming from expanded investment in AI and high-bandwidth memory (HBM). The argument is that while this year’s performance is sluggish, the sale price should be raised higher because the wafer industry cycle improves with a time lag.
The buyer’s view differs. SK Siltron posted earnings before interest, taxes, depreciation and amortization (EBITDA) of 459.3 billion won last year, down 28.2% from the previous year, and its first-quarter EBITDA also fell 31.7% year-on-year to 72 billion won. Net borrowings also rose 17.8% from a year earlier to 242.4 billion won. A financial industry official said, “The delay in signing the main contract is due to differences in views on SK Siltron’s valuation,” adding, “There will likely be further progress this month.”
Some interpret that this deal is highly likely to fall through. There is also talk that SK has set an internal policy at the group level not to sell SK Siltron, and could formalize this as early as this week or next week at the latest. A senior business community official stressed, “If the deal had gone wrong, would SK have said on the 15th that it had selected a preferred bidder and would re-disclose later? For SK, an appropriate price would be important,” while adding, “It is true that, given the overall mood, the possibility of the deal falling through has increased compared to before.”