OCI eyes acquisition of US biopharmaceutical company

OCI Holdings Co., South Korea’s largest polysilicon maker, is looking abroad to acquire a biopharmaceutical company in the US in a consortium, or invest in a Southeast Asian company, after the collapse of its merger with Hanmi Science Co. in March, its chairman said on Tuesday.

It is zooming in on companies with sound financial conditions in line with its goal of maintaining an average return on equity of 20% or more.

“We’ve reviewed a few pharmaceutical companies in the US, chasing a deal in the trillion won range at the minimum,” OCI Chairman Lee Woo-hyun said at a press conference held to commemorate the first anniversary of OCI Holdings.

“We plan to form a consortium in which OCI Holdings participates as a strategic investor.”

The planned merger with Hanmi Science, the holding company of Hanmi Pharmaceutical Group, faltered in March due to a family feud at Hanmi, which shows no signs of ending.

“A lesson learned from the failure of the Hanmi Science deal,” Lee told reporters.

When announcing the deal with Hanmi in January, OCI had expected to turn into a global pharmaceutical and biotech behemoth from a petrochemical company, following in the path of Germany’s Bayer.

Hanmi, with more than 30 new drugs in the pipeline, was attractive for OCI seeking to expand beyond being a general drug maker.

In 2022, OCI purchased Bukwang Pharm Co. Lee has been leading the mid-size Korean pharmaceutical company as CEO since November last year.

OCI is also looking for an investment target among biopharmaceutical companies in Southeast Asia with about $500 million in market capitalization. 

“But we will invest in one company either in the US or in Southeast Asia, considering our cash flow,” Lee noted.

“Any new business we invest in should create more than 20% ROE and operating profit margin.”

It will also beef up polysilicon production for solar panels and polycrystalline silicon used in semiconductors.

Last month, the company announced a plan to invest up to 2 trillion won ($1.5 billion) in Malaysia to increase the manufacturing capacity of polysilicon for solar panels. 

Write to Hyeon-Woo Oh at ohw@hankyung.com

Yeonhee Kim edited this article.