This article was displayed on the ChosunBiz MoneyMove (MM) site at 3:37 p.m. on Jun. 19, 2026.
The United Arab Emirates (UAE) sovereign wealth funds Mubadala is reviewing a plan to invest in domestic defense company MNC Solution. It would do so by committing to the Korea Investment & Securities Co. Partners PE Division project fund, the preferred bidder (preferred negotiation partner) for acquiring MNC Solution. The industry interprets this as growing interest from foreign capital in the growth potential of so-called "K-defense."
According to the investment banking (IB) industry on the 19th, Korea Investment & Securities Co. Partners PE, as the preferred bidder to acquire MNC Solution, is in final talks with the sellers over price terms. As early as the end of this month, it plans to sign a stock purchase agreement (SPA), followed by a full-fledged launch of the project fund.
Large overseas institutional investors, including Mubadala, are said to be reviewing commitments to the project fund even before the SPA is signed. The target for acquisition is a 73.78% management-control equity stake in MNC Solution held by the Socius–Well to Sea Investment consortium, and the price is expected to be set around 1 trillion won. About half, roughly 500 billion won, will be raised through a blind fund and a project fund.
Behind Mubadala and others' interest in MNC Solution is the expansion of exports in K-defense. Since the Ukraine-Russia war, demand for conventional weapons has increased, especially in Europe, and the Middle East is also seeing rising needs for modernization of air defenses and ground weapons. In fact, Korean defense companies are landing major orders around the world, including in the Middle East.
Defense cooperation between the UAE and Korea is also strengthening. The two countries signed a memorandum of understanding (MOU) in February this year covering air defense, air force, and navy sectors, totaling $35 billion.
From the perspective of Middle Eastern sovereign wealth funds, defense parts makers are attractive investment destinations. MNC Solution does not build finished weapons systems, but as a supplier of key components such as hydraulics and drive systems, it is seen as a company that can directly benefit from the trickle-down effects of expanding K-defense exports. In particular, once defense parts are adopted into a specific weapons systems, there is a strong likelihood of continued replacement parts and maintenance over the equipment's service life. As a result, analysts say this aligns well with sovereign wealth funds that prefer long-term investments.
Some also note that strict restrictions apply when foreign capital invests in defense companies like MNC Solution. Under Article 6 of the Foreign Investment Promotion Act, foreigners must obtain permission from the Minister of Trade, Industry and Resources if they acquire new or existing shares with the purpose of participating in the management activities of a Korean defense company.
However, industry officials said there should be no major issue if foreign capital does not exceed 50% of the total fund size. Article 18-3, Paragraph 1 of the Enforcement Decree of the Act on the Prevention of Divulgence and Protection of Industrial Technology defines "foreign investment" as a case where 50 out of 100 or more of a target institution's stock or equity is intended to be owned.
An IB industry official said, "MNC Solution is a key parts maker that directly benefits from the expansion of K-defense exports, so sovereign wealth funds and pension funds overseas inevitably have strong interest."
Still, as the domestic stock market has increasingly concentrated on mega-cap semiconductor shares, the defense stock MNC Solution has been weak, making it important to smoothly sign the SPA by bridging the price gap between the sellers and the preferred bidder.
MNC Solution shares have fallen about 40% so far this year. In response, the company decided to conduct a bonus issue of two shares per one share to increase the free float and bolster price stability.