Kolon Global to Split Personnel... Separating Construction and Automobile Divisions

Kolon Global and Kolon Mobility Group Undergo Corporate Spin-Off

[Asia Economy Reporter Hwang Seoyul] Kolon Global has decided to split its construction and automobile divisions through a spin-off.

On the 20th, Kolon Global's board of directors approved the spin-off of the construction and trading divisions into Kolon Global, and the automobile division into a newly established company, Kolon Mobility Group. The imported car division, including BMW, Audi, Volvo, Jeep, and Rolls-Royce, will be separated into the new company Kolon Mobility Group, while the existing construction and trading divisions, Kolon Sporex, and other subsidiaries will remain with the continuing company Kolon Global. Based on the value of held assets, the spin-off will be executed on January 1 next year at a ratio of 75 to 25 between the continuing company and the new company, and Kolon Mobility Group will be newly established and re-listed.

Kolon Mobility Group plans to restructure and expand its business focused on imported car distribution and sales to become a comprehensive mobility service provider. It will secure new brands in the SUV and EV sectors to build a multi-brand portfolio and expand the mobility-related value chain beyond the existing offline-centered distribution to include premium subscription services and used car businesses.

The automobile division of Kolon Global has recorded an average annual growth rate of over 12% in vehicle sales from 2012 to this year. Even after the spin-off, it is expected that corporate value will be re-evaluated through mid- to long-term innovations such as strengthening multi-brand presence, expanding networks, and entering related new businesses based on this stable performance.

Lee Gyuho, who has been the head of Kolon Global's automobile division, will focus on establishing future growth strategies, discovering new businesses, and strengthening financial capabilities as a co-CEO of the new company. Jeon Cheolwon, former head of the BMW division, will serve as the other co-CEO, solidifying the new company's sales foundation by managing sales and A/S networks centered on existing businesses. The goal is to achieve KRW 3.6 trillion in sales and KRW 100 billion in operating profit by 2025.

The continuing company, Kolon Global, also views this spin-off as an opportunity to enhance investment efficiency. In addition to the existing order backlog exceeding KRW 10 trillion, by actively promoting eco-friendly energy businesses, it expects to achieve new orders of KRW 4 trillion, sales of KRW 3.8 trillion, and operating profit of KRW 290 billion by 2025. The construction division plans to expand high-profit development projects such as joint ventures and self-developed projects based on OSC (off-site construction). Sustainable growth will continue through the expansion of onshore and offshore wind power projects and the production of power and hydrogen energy based on wind power.

A Kolon Global official said, "Considering the rapidly changing business environment recently, we decided on the corporate split," adding, "Even after the split, we plan to continue sustainable growth by maximizing efficiency and implementing tailored growth strategies, sharing profits with shareholders."