Hanhwa Chemical drops plan to buy Sulfindo-sources

JAKARTA/SEOUL, Sept 19 Mon Sep 19, 2011 8:50am EDT

JAKARTA/SEOUL, Sept 19 (Reuters) - South Korea's Hanwha Chemical dropped a plan to buy Indonesian chemical producer Sulfindo Adiusaha in a potential $700 million deal, said two source familiar with the matter on Monday.

The second round of bids for Sulfindo is due later this month, with the deal attracting foreign players including Thai industrial conglomerate Siam Cement .

"Hanwha is out of the race due to pricing issue," a source with direct knowledge to the deal told Reuters, declining to be named because of the sensitivity of the issue.

A Hanwha spokesman could not be reached for comment.

Sulfindo is controlled by the Victoria Group, owned by Indonesia's Tanojo family, who also own small lender Bank Victoria and brokerage Victoria Securities. Macquarie is the sell-side adviser for the deal, three sources told Reuters earlier. (Reporting by Janeman Latul in Jakarta and; Ju-min Park in Seoul; Editing by Hans-Juergen Peters)

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