Taekwang Industrial secured control of South Korean cosmetics maker Aekyung Industrial in a nearly 500 billion won ($360 million) deal, as the struggling chemical and textile company attempts to capitalize on the global K-beauty boom.
A Taekwang Industrial-led consortium, joined by T2 PE and Yuanta Investment Co., has been picked as the preferred bidder for a 63% stake in Aekyung Industrial, beating Hong Kong-based private equity firm Anchor Equity Partners and Pole Capital Korea, according to investment banking sources.
The acquisition represents a strategic pivot for Taekwang, which has faced mounting pressures in its core petrochemical operations. The company recently halted operations at its Chinese spandex factory for the first time amid deteriorating profitability, highlighting the urgency of its diversification efforts.
The deal price came in below Aekyung Group’s initial expectation of around 600 billion won, reflecting market conditions for distressed sellers. Aekyung Group, burdened by total debt of about 4 trillion won with a debt-to-equity ratio of 328.7%, is divesting its founding business to ease liquidity pressures.
Taekwang’s financing plans face uncertainty after its second largest shareholder, Truston Asset Management, applied for an injunction to block the company’s exchangeable bond issuance. The company plans to leverage Aekyung’s portfolio, which includes brands like Kerasys and 2080, to expand in consumer markets.
The two parties plan to close the deal by the end of 2025.
