Scheduled to Launch as 'HD Construction Equipment' in January Next Year
Resolving Overlapping Structures and Unifying Product and Plant Systems
Focusing on Compact, AM, and Engine Businesses... Strengthening Smart Equipment
Targeting 14.8 Trillion Won in Sales and 11% Operating Margin by 2030
Over 30% of Net Profit to Be Returned to Shareholders... "A Catalyst for Sustainable Growth"
HD Hyundai Construction Equipment and HD Hyundai Infracore, both construction machinery affiliates of the HD Hyundai Group, have decided to merge. The newly integrated entity, tentatively named 'HD Construction Equipment,' is scheduled to launch on January 1 next year.
On July 1, both companies held board meetings and announced that they had approved the merger proposal. The merger will proceed with HD Hyundai Construction Equipment as the surviving entity, while HD Hyundai Infracore will be incorporated into it. After an extraordinary general meeting of shareholders and a business combination review scheduled for September 16, the integrated corporation will officially launch at the beginning of next year. The combined annual sales of the new entity are estimated at approximately 8 trillion won. The merger ratio is set at 0.1621707 shares of HD Hyundai Construction Equipment common stock for each common share of HD Hyundai Infracore.
Through this merger, HD Hyundai aims to unify its decision-making system, optimize its product lineup, and specialize its production system in order to enhance cost competitiveness and business efficiency. The company also plans to expand investments in research and development (R&D) focused on future technologies such as electrification and smart equipment, and to foster its engine and aftermarket (AM) parts maintenance business.
In addition, the integrated company has set a goal of achieving annual sales of 14.8 trillion won by 2030 and becoming a global top-tier construction equipment company. The dual-brand strategy will be maintained, with both 'HYUNDAI' and 'DEVELON' operating together.
HD Hyundai has maintained a parallel operating system since acquiring Infracore in 2021. However, according to internal evaluations, the limitations of a duplicated structure have become apparent amid recent supply chain instability and market slowdown. This merger is seen as a strategic decision aimed at strengthening responsiveness through the integration of production planning, R&D, and resource allocation. During a conference call on this day, Youngchul Cho, CEO of HD Hyundai Site Solution, stated, "The overlap in product and plant operations between the two companies has prevented us from fully realizing synergies. Through the merger, we will simplify the supply system and establish a foundation to focus on investments in future technologies."
The integrated company aims to enter the global top 10 by combining two companies that previously ranked around 20th. Its blueprint includes achieving 14.8 trillion won in sales and an operating margin of over 11% by 2030. On this day, CEO Cho presented key strategies to achieve these goals: expanding compact (small) and ultra-large equipment, strengthening the AM and engine businesses, and taking the lead in the electrification and smart equipment markets.
Specifically, for compact equipment, an independent business division focused on mini excavators and wheel loaders will be established to expand channels in North America and Europe. AM sales are planned to increase to 1.4 trillion won by 2030. In the engine sector, the company aims to raise the self-installation rate to 70-80% and expand into high-value-added areas such as high-output engines for defense and power generation. For electrified equipment, battery-based models will be introduced across major product lines by 2027, and smart equipment will evolve into solution-based products such as 'Machine Guidance' and 'Site Simulator.'
Jongho Cheon, Executive Vice President of HD Hyundai Site Solution, emphasized, "The merger of the two companies is not simply an expansion in scale, but a fundamental improvement. Based on an efficient cost structure and technological leadership, we will deliver results that surpass the growth rate of the global construction equipment market."
HD Hyundai also announced a plan to allocate more than 30% of its net profit over the next three years to shareholder return policies. The company intends to link the benefits of the merger to dividend stability and thereby enhance shareholder value. CEO Cho stated, "This merger of HD Hyundai's construction equipment division will serve as a catalyst for sustainable growth. We will establish a new milestone in the development of Korea's construction equipment industry and solidify our status in the global market."
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