Elliott Withdraws from Hyundai Motor Group... Sold All Shares by End of Last Year

Hyundai Motor Group Escapes 'Elliott Risk', Likely to Accelerate Corporate Governance Restructuring

Hyundai Kia Motors Yangjae Headquarters

[Asia Economy Reporter Kim Ji-hee] It has been reported that the US-based hedge fund Elliott has sold all of its shares in Hyundai Motor, Kia Motors, and other Hyundai Motor Group affiliates. With Elliott, which had repeatedly blocked major decision-making processes, stepping down, there are expectations that the restructuring of Hyundai Motor Group's governance will accelerate once again.

According to industry sources on the 22nd, Elliott sold all of its shares in Hyundai Motor, Kia Motors, and Hyundai Mobis by the end of last year. The most recent shareholding disclosed directly by Elliott was 2.9% in Hyundai Motor, 2.1% in Kia Motors, and 2.6% in Hyundai Mobis. Accordingly, Elliott's name is said to have disappeared from the shareholder registry, which was closed at the end of last year.

In April 2018, Elliott announced that it had purchased and held approximately $1 billion (about 1.1 trillion KRW) worth of shares in the three Hyundai Motor Group companies. Declaring its intention to participate in Hyundai Motor Group's management, Elliott then blocked the governance restructuring plan that Hyundai Motor Group was promoting. It demanded a merger between Hyundai Motor and Hyundai Mobis or a high dividend payout totaling about 8.3 trillion KRW.

In response, Hyundai Motor Group halted the restructuring plan, which involved splitting some business units of Hyundai Mobis and merging the after-sales parts division with Hyundai Glovis, and canceled the extraordinary general shareholders' meeting.

Last year, Elliott also engaged in a proxy battle at the shareholders' meetings of Hyundai Motor and Hyundai Mobis, demanding high dividends and the appointment of outside directors they proposed. However, due to Elliott's excessive demands, shareholders turned away, and all proposals put forward by Elliott were rejected.

Subsequently, Elliott, which had shown a more passive stance than before, appears to have ultimately sold its shares in Hyundai Motor Group at a loss.

Industry insiders expect that with Elliott's withdrawal, Hyundai Motor Group's mid- to long-term investments in future vehicles and mobility will gain momentum. Additionally, it is analyzed that the governance restructuring work, which was halted after the cancellation of the extraordinary shareholders' meeting, may also accelerate again.