Building materials company Eugene Corp has joined the race to acquire Doosan Infracore, the construction equipment arm of cash-strapped South Korean conglomerate Doosan Group, in the hope of expanding its construction sector portfolio.

An affiliate of Eugene Group, the company is among the contenders that have advanced to the final round of bidding for a controlling stake of 36.07% in Doosan Infracore, industry sources reported on October 8.

Eugene Group has used a series of mergers and acquisitions (M&As) to build up its operations in construction, financial and logistics services and leisure and entertainment businesses in the past 15 years and will have similar plans for Doosan Infracore.

The group bid for Daewoo Engineering & Construction in 2006 to achieve a vertical integration, but was unsuccessful. Instead, it acquired Seoul Securities – now known as Eugene Investment & Securities – in the same year to enter the financial services sector. In 2007 Eugene Group expanded into logistics services after buying Korea Logistics and Logen Logistics, and also acquired electronics store Hi-Mart for more than 1.9 trillion won ($1.6 billion).

Its acquisition activity was temporarily suspended because of a weakened financial position after the 2008 global financial crisis, with Logen Logistics and Hi-Mart offloaded by the group in 2010 and 2012 respectively as part of a restructuring plan. But the group was back in 2016 with the takeover of plant engineering company Tongyang Inc, and a year later purchased Hyundai Savings Bank, since renamed Eugene Savings Bank.

The company is said to have continued its search for potential acquisition targets in the past couple of years. “Eugene Group has keen interest in potential acquisitions as a means of finding new growth drivers,” said an industry insider.

Eugene Corp, which primarily produces construction materials like ready-mixed concrete, and Doosan Infracore do not have many things in common. This could give a competitive edge to rival strategic bidder Hyundai Heavy Industries, which has a heavy equipment subsidiary. With a market capitalization of about 329 billion won, Eugene Corp is also much smaller than Doosan Infracore, whose market capitalization exceeds 1.8 trillion won.

However, Eugene Group would use its wide experience in M&A deals to overcome these weaknesses, industry watchers said. It is also reportedly seeking a partnership with a financial investor to make a more competitive bid. (Reporting by Ah-kyoung Lee and Hee-yeon Han)