GS Goldman Sachs Group Inc

By Rick Carew 

HONG KONG-- Goldman Sachs Group Inc. is near a deal to sell a South Korean industrial gases business for around $1.8 billion, netting the Wall Street bank a hefty return for its stake in the business, according to people familiar with the situation.

A consortium led by MBK Partners LP, one of Asia's biggest homegrown private-equity funds, beat out rival private-equity bidders to enter into exclusive negotiations to buy all of Daesung Industrial Gases Co., according to the people. MBK's bid includes financial backer Canada Pension Plan Investment Board, the people said.

The sale is sizable for private-equity deals in the region. A Goldman-led consortium paid $400 million to buy 68% of the industrial gas business of South Korean conglomerate Daesung Group Partners Co. in July 2014.

The South Korean conglomerate was forced to sell the stake in the business after it overextended itself in the construction and real-estate sectors and needed to raise cash by selling assets. Daesung Group had an option to repurchase Goldman's stake later but decided to not exercise that and to work with Goldman toward a full sale of the business, the people said.

MBK Partners--which manages more than $10 billion of capital and is led by Michael B. Kim--has cut big deals across the region, including one in 2015 to buy U.K. retailer Tesco PLC's South Korean operations for $6.1 billion in cash. The transaction was South Korea's largest private-equity deal ever.

Daesung Industrial Gases produces oxygen and nitrogen, among other industrial and specialty gases, that are used in a wide range of industrial production processes including in the semiconductor industry and electronics. A major customer for the company is LG Display Co.

Write to Rick Carew at rick.carew@wsj.com

(END) Dow Jones Newswires

February 16, 2017 05:38 ET (10:38 GMT)

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