GS Group to Continue M&A Drive
By Yoon Ja-young
Staff Reporter
GS Group is continuing its M&A efforts, looking for opportunities in domestic and overseas markets. It is also searching for an overseas engineering company to help enhance its capability in oil and chemical plant construction.
``GS Construction is looking for an overseas engineering company in Europe and the United States, experienced in plant construction,'' said GS Group Chairman Huh Chang-soo, at the press meeting held in Elysian Country Club on Jeju Island over the weekend.
He also hinted that the group is interested in taking over Daewoo Shipbuilding & Marine Engineering. When asked about conditions regarding the shipbuilder, Huh said price matters most. ``The price should be appropriate. What would our shareholders say if we buy it at an expensive price?''
He said the group is capable of engaging in multiple takeover bids. ``The burden won't be huge if each subsidiary shares the task, say, GS Holdings takes charge of Daewoo, GS Construction gets an engineering company, and GS Caltex takes Hyundai Oil Bank.'' The construction arm and the energy business got rated by Moody's to ease overseas funding in case they needed it. Huh said that the group has enough money to engage in major M&A bids in the country.
Regarding Hyundai Oil Bank, Huh said the takeover would have a synergy effect. It also handed in a letter of intent to take over Hi-Mart, which would produce a synergy with GS Retail. These M&A projects could act as a launch pad for the group to become one of the top three conglomerates.
Huh stressed that the group has continued investment, apart from M&A efforts. ``M&A is not always the best. It is also very crucial to create profits by improving the facilities we have.'' He explained that the group invested over 5 trillion won since 2005 in the GS Caltex facilities, and over 10 trillion won investment is to come within two or three years to enhance profitability. ``The No. 2 heavy oil upgrading (HOU) of GS Caltex is expected to make a huge contribution to the profit,'' the chairman said.
He chose energy as the group's future industry. ``There are infinite business opportunities in the energy sector.'' He said Korean firms have know-how in plant construction, and are likely to develop further in the future. The group is likely to find growth engines in oil refinery and aromatics production plant construction, where it is one of the top global players, instead of digging into totally new fields.