Goldman picked to handle Daewoo Shipbuilding sale

SEOUL (Reuters) - Goldman Sachs (GS.N) has been picked to manage the sale of Daewoo Shipbuilding and Marine Engineering Co Ltd (042660.KS), Daewoo Shipbuilding's top shareholder said on Monday, kicking off a deal expected to fetch more than $4 billion.

The sale is poised to become the biggest M&A transaction in South Korea this year, as the state-run Korea Development Bank (KDB) and other banks are putting up their 50.4 percent stake in the world's third-largest shipbuilder.

The stake has a market value of 4.4 trillion won ($4.4 billion).

"If it proceeds smoothly, we will be able to select a preferred buyer by the end of August," a KDB spokesman said.

Ernst & Young ERNY.UL was selected as the accounting adviser and South Korean law firm Lee & Ko as legal adviser.

The upcoming deal has drawn interest from a number of domestic companies, including steel giant POSCO (005490.KS), South Korean business group Hanwha and GS Holdings Corp (078930.KS), a holding firm of energy- and construction-focused GS Group.

Shares of Daewoo Shipbuilding rose 3.9 percent to 45,700 won by 0542 GMT, outstripping the wider market's 1.6 percent gain.

Goldman Sachs has topped South Korean M&A league tables, lead managing the 2007 sale of broadband provider hanarotelecom (033630.KQ) shares by a consortium led by American International Group to SK Telecom (017670.KS).

($1=993.5 Won)

(Reporting by Kim Yeon-hee; Editing by Edmund Klamann)