Korea & Company Invests Additional 1.7 Trillion KRW in Hanon Systems
Secures Majority Stake to Gain Management Control
Emerges as High-Tech Company with 'Two Major Electric Vehicle Core Technologies'
Korea & Company Group Jumps to 30th Place in Business Rankings
The background behind Hankook Tire & Technology's acquisition of Hanon Systems' management rights reflects Chairman Cho Hyun-beom's determination to lead the electric vehicle market with advanced technology. The strategy is to solidify its position as a high-technology company by leveraging synergies in core electric vehicle component businesses, from tires to batteries and thermal management systems.
On the 3rd, Hankook & Company Group decided to acquire 25% of the existing shares of Hanon Systems and participate in a paid-in capital increase. The existing shares were acquired from the private equity firm Hahn & Company, and the shares acquired through the paid-in capital increase amount to 12.2% of new shares.
Through this, Hankook Tire & Technology, a subsidiary of Hankook & Company Group, will hold a total of 50.53% of Hanon Systems' shares and secure management rights. The private equity firm Hahn & Company remains the second-largest shareholder. The amount Hankook Tire is investing in this deal is approximately 1.733 trillion KRW.
In 2014, Hankook Tire acquired 19.49% of Hanon Systems' shares for 1.08 trillion KRW. Including this additional share acquisition, the total amount Hankook Tire has invested in Hanon Systems expands to 2.8 trillion KRW.
Through this acquisition, Chairman Cho declared a leap forward as a high-technology company suited for the electric vehicle era. Since first acquiring shares in Hanon Systems 10 years ago, he has envisioned a business model as a leader in mobility electrification by combining global top-tier tires and thermal management systems. Synergies are expected not only in technical R&D for electrified vehicles of both companies but also in sharing sales strategies for global clients and various other areas.
From Hanon Systems' perspective, the acquisition by Hankook Tire is a card to minimize changes in governance structure. Since Hankook Tire formed a consortium with Hahn & Company, the largest shareholder, and has worked closely from the early stages of the acquisition, the existing business and personnel structure can be maintained without major changes.
Hankook & Company Group plans to complete all necessary procedures for the acquisition by the end of this year at the earliest. Once the acquisition process is completed, the group's global total assets are expected to grow to about 26 trillion KRW, entering the top 30 business groups in Korea.
Chairman Cho stated, "Through this acquisition, Hankook & Company Group will possess core electric vehicle components such as tires and automotive thermal management technology, advancing as a high-technology company in the electric vehicle era. While increasing the group's asset size, we will grow into a group with sales of 30 trillion KRW by 2030 through expansion into additional businesses based on next-generation technologies."
Hanon Systems is the second-largest player in the global automotive thermal management market, following Japan's Denso. Starting as an automotive air conditioning parts company, it has recently grown into a thermal energy management solutions company in the eco-friendly vehicle market. It was launched in 1986 as a joint venture between Mando Machinery and Ford Motor Company and was incorporated into Ford Visteon in 1998.
In 2014, the private equity firm Hahn & Company formed a consortium with Hankook Tire & Technology (hereafter Hankook Tire) to acquire 70% of Hanon Systems' shares held by Visteon. The previous shareholder structure had Hahn & Company as the largest shareholder and Hankook Tire as the second-largest, but with this investment contract, the order of the first and second largest shareholders is reversed, and management rights will transfer to Hankook Tire.
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