On March 28, Momentive officially announced that Momentive will be fully acquired by South Korea's King Kong Chemical (KCC), SJL Partners LLC, a minority shareholder of Momentive, may withdraw, and Momentive will also become the silicone business unit of King Kong Chemical Group.
Korea Kongo Chemical is a conglomerate engaged in building materials, coatings, silicones, glass and construction businesses, and is the largest manufacturer of paints and building materials in Korea, with a 38% market share in the coatings business in South Korea. Currently, there are more than 15 factories in Korea, 21 domestic branches, and 16 overseas subsidiaries and branches. KCC's coatings business reported revenue of 1,514.3 billion won ($1,194.9 million) in 2022.
South Korea's King Kong Chemical Company Building
KCC has been in the field of silicones since 2000 and has been commercially producing silicones since 2004. Over the next 50 years, KCC plans to develop silicon manufacturing, including silicones, into the company's largest pillar industry and one of the world's top four silicon manufacturers.
Since 2006, KCC has been developing downstream derivative products based on silicones, such as silicones in cosmetics, and has been supplying them to cosmetics companies in Korea and abroad. It is understood that KCC Group's annual sales are as high as 1.3 trillion won, ranking fifth in the global cosmetics silicon market. Driven by the "Korean Wave", the prospects of KCC's silicon industry are getting better and better. Seeing the optimistic prospects of the silicone market, KCC began to increase its layout in the global silicone market, focusing on Momentive New Materials Group, the world's second largest silicone material manufacturer.
Momentive is the world's second-largest manufacturer of silicones, developing and producing specialty silicones and silanes, as well as fused silica and specialty ceramic products. With a history of more than 75 years, Momentive has provided products and solutions to more than 4,000 customers in more than 100 countries. The company has a global network of 24 production sites and 12 R&D facilities.
Momentive Factory
Momentive's silicon business segment is divided into functional additives and silicones, with sales revenue of $973 million and $1.522 billion in 2018, respectively. The Functional Additives segment is mainly used in the automotive, consumer goods, construction, cosmetics, agriculture and other industries. The silicone segment will be used in a variety of industries such as elastomers, sealants, coatings and electronics.
As early as May 15, 2019, King Kong Chemical announced that it had completed the acquisition of Momentive at a transaction price of about 3.1 billion US dollars (about 3.5 trillion won). King Kong said it has a 45% stake in Momentive, while SJL holds 50% and the rest is held by Wonik. The consortium plans to take full ownership of the company by buying the remaining 25% of the shares from the over-the-counter market.
With the completion of this acquisition, the silicone business is expected to become a new growth engine for the KCC Group and drive its future growth. KCC silicone sales are expected to surge from the current KRW 200 billion to more than KRW 2 trillion.
In terms of R&D and production of silicone products, King Kong Chemical Group has shown strong strength and forward-looking strategic layout. With this comprehensive acquisition of Momentive, King Kong Chemical is expected to make its mark in the silicone market dominated by the United States, Japan, Germany, etc., and expand its integrated building materials and interior decoration business such as advanced materials, coatings, glass, flooring, doors and windows globally. Looking ahead, the combination of King Kong Chemical and Momentive will strongly promote the innovation and development of the global silicone market.