This article was displayed on the ChosunBiz MoneyMove (MM) site at 2:15 p.m. on Jan. 15, 2026.
Domestic private equity fund (PEF) managers J&Partners and Keystone Partners formed a consortium with HD Hyundai Oilbank, LX International, and JC Chemical to pursue the acquisition of bio-diesel feedstock producer Daekyung O&T. Daekyung O&T is in the process of selling equity as SK On seeks to improve its financial structure.
According to the investment banking (IB) industry on the 15th, the consortium plans to submit a letter of intent (LOI) next week to bid for Daekyung O&T. The sale target is 100% equity in Daekyung O&T. SK On and Eugene Private Equity–Korea Development Bank Private Equity each hold 60% and 40% equity in Daekyung O&T. The sale price is expected to be in the 400 billion–500 billion won range.
J&Partners will form a 100 billion won fund with a strategic investor (SI), and Keystone Partners plans to invest in the special-purpose company (SPC) that will acquire Daekyung O&T by using its existing blind fund. The plan is to take over 180 billion won in acquisition financing from Korea Development Bank and have Keystone Partners cover the remainder.
Daekyung O&T is the No. 1 company in Korea supplying bio raw materials based on used cooking oil and animal fats. It imports soybeans from overseas to make cooking oil, or processes used oil from households and restaurants into eco-friendly renewable energy. Using waste oils generated during animal slaughter, it also produces feedstocks for automotive and marine fuels and sustainable aviation fuel (SAF).
The consortium plans to build a value chain that goes beyond a simple alliance, connecting "procurement-collection-preprocessing-consumption." Leveraging its global network, LX International will procure scarce used cooking oil and animal fats at low cost at home and abroad, and Daekyung O&T will collect and conduct primary processing to serve as a large-scale feedstock base. JC Chemical will then precisely preprocess Daekyung O&T's feedstock to match HD Hyundai Oilbank's refining process specifications and supply it.
Observers say the consortium is likely to have an edge in being named the preferred bidder because it can form a stable captive market (internal market). Refiners such as GS Caltex and Japan's ENEOS have also shown interest in acquiring Daekyung O&T, but they are reportedly yet to find suitable partners to join the bid.
In 2023, SK Trading International (SK TI) and KDB PE and Eugene PE set up an SPC and acquired Daekyung O&T from STIC Investments for about 400 billion won. They split the SPC equity 4 to 6, respectively. Last year, when SK TI was merged into SK On, SK On came to hold the SPC equity.
Daekyung O&T's performance has cooled. The launch of the Trump second-term administration, which is passive on the energy transition, and Europe's move to moderate the pace of its transition plans have weighed on results. After posting 584.5 billion won in revenue and 40.2 billion won in operating profit in 2023, Daekyung O&T last year recorded 502.7 billion won in revenue and 30.5 billion won in operating profit, with both revenue and profit declining.
An HD Hyundai Oilbank official said, "We are reviewing various measures to secure biofuel, but nothing has been decided specifically."