Korea & Company Acquires Hanon Systems... Leap to 'Electric Vehicle High-Tech' Company

Korea & Company Signs Definitive Agreement to Acquire Hanon Systems
Building Tire, Battery, and Thermal Management Portfolio
First Achievement Since Chairman Cho Hyun-beom's Management Dispute
Actively Pursuing Vision as an 'Electric Vehicle High-Tech' Company

Cho Hyun-beom, Chairman of Korea & Company Group (Photo by Korea & Company)

Korea & Company Group signed the final contract for the acquisition of Hanon Systems about six months after starting the deal, investing approximately 1.73 trillion KRW. With total assets rising to around 26 trillion KRW, the group has entered the top 30 in the business world rankings.

Korea & Company announced on the 1st that it signed the final acquisition contract, a Stock Purchase Agreement (SPA), with Hahn & Company (Hahn & Co.) on the 31st of last month. This comes about 180 days after Korea & Company Group and Hahn & Co. signed a Memorandum of Understanding (MOU) for the Hanon Systems acquisition in May. The amount Korea & Company invested in this acquisition is approximately 1.73 trillion KRW, including a paid-in capital increase of 365.1 billion KRW. Adding the 25.53% stake purchased from Hahn & Co., the paid-in capital increase, and existing holdings, Korea & Company’s stake in Hanon Systems stands at 54.77%.

The acquisition of Hanon Systems by Korea & Company Group is expected to be finalized within this year. The company stated, "Prior to signing the final contract, approvals for overseas corporate merger reviews have been completed in the U.S., European Union (EU), Canada, China, Turkey, and Mexico," adding, "Once payments for the new shares issued through the paid-in capital increase and the old shares held by Hahn & Co. are made, the acquisition will be completed, including approvals related to the Foreign Subsidy Regulation (FSR) and other overseas government consents."

Korea & Company plans to maximize synergy by integrating Hanon Systems’ resources and technology to actively create new growth engines for the future. First, they will jointly utilize overseas sales networks and consolidate supply chain management (SCM) capabilities, including raw materials. They will also merge IT infrastructure, work processes, and organizational culture.

◆ First achievement after resolving management dispute = The acquisition of Hanon Systems is the first achievement following the management dispute between Chairman Jo Hyun-beom of Korea & Company and his elder brother, former advisor Jo Hyun-sik. It is said that the company devoted efforts to this acquisition to stabilize the internal and external turmoil and move forward. Additionally, Chairman Jo has steadily shown interest in acquiring Hanon Systems since 2014 by purchasing shares, envisioning growing the group into an "electric vehicle high-tech" company in the era of electric vehicles.

In a welcoming message announcing the merger to all employees of Korea & Company Group and Hanon Systems on the day, Chairman Jo also mentioned the first share acquisition 10 years ago and expressed aspirations for future integration and collaboration.

Chairman Jo stated, "This acquisition will serve as an opportunity for Hanon Systems’ advanced technology and unique capabilities to be leveraged as a greater driving force," emphasizing, "Based on the assets of personnel and experience from both companies, the group will secure the highest and most solid position in the electric vehicle era." He added, "Since our first meeting 10 years ago, we are now ready to begin a higher leap," and requested, "I ask for the active participation and cooperation of all members."

◆ Realization of the vision as an 'electric vehicle high-tech' company is imminent = With this acquisition, Korea & Company has established a portfolio encompassing tire, battery, and thermal management (HVAC) systems. The business synergy with Hanon Systems is expected to first appear in the electric vehicle parts sector. At the group level, they are also supporting the electric vehicle brand 'ION,' and with the increased importance of thermal management due to electric vehicle fires, this acquisition is seen as a perfect fit for advancing as an "electric vehicle high-tech" company.

This is also expected to help secure customers. Hanon Systems has collaborated with several companies, including Hyundai Motor Group, Ford, Volkswagen, BMW, and Mercedes-Benz. Generally, tire manufacturers and automotive parts companies sign contracts with automakers through similar procedures and processes. Both tire and parts companies produce and supply customized products tailored to new vehicles in line with vehicle development. Since both thermal management and tires are core components, synergy effects are expected in sales as well.

A Korea & Company official explained, "We can quickly identify the needs of domestic and international automakers and, in the long term, expect integration of parts modules that could link with the tire business."