SEOUL, Korea, Sept. 27, 2010 - Hyundai Motor Group (the Group) announced today it will participate in a bid to acquire a controlling stake in Hyundai Engineering & Construction (Hyundai E&C) to strengthen the Group’s future business opportunities and diversify its business portfolio.
The Group, led by Hyundai Motor Co., decided to participate in the bid as it recently completed building its first integrated steel mill, Hyundai Steel Co., while the Group’s auto business has also securely positioned itself among the leading automakers in the global market.
The Group expects to complete an “Eco Value Chain” through the acquisition, creating synergy among related businesses such as eco-friendly power plants to houses that accommodate recharging systems to hybrid and electric vehicles. Hyundai Motor Group has said it will concentrate on environmentally-friendly businesses for future growth.
Hyundai E&C will also be able to further cement its global position through the Hyundai Motor Group’s approximately 8,000 manufacturing and sales operations in over 150 countries. Hyundai E&C will also be able to participate in the Group’s existing high-speed rail businesses overseas, while receiving secure supplies of construction material from Hyundai Steel and Hyundai Hysco. This type of synergy created with the Group’s auto business and the enforcement of the construction business through the Group’s existing plant and engineering businesses will enable Hyundai E&C to become a fully integrated world-class engineering company.
To achieve these goals, the Hyundai Motor Group will increase investment in Hyundai E&C and hire more professionals in the field after the acquisition to contribute to the construction industry and the national economy at large. The Group values the expertise and skills of the current staff and plans to maintain and nurture the existing organization.
The Group will not consider merging Hyundai E&C with its existing affiliate, Hyundai Amco after the acquisition, as the two companies compete in different areas. Hyundai E&C’s specialty is in comprehensive engineering and overseas construction projects, while Hyundai Amco’s business mainly comprises of the construction and maintenance of the Group’s offices and facilities.
Regarding financing, the Group will use its own capital to fund the stake acquisition. The Group has created a team to review the acquisition, hiring Goldman Sachs, Samil PricewaterhouseCoopers, HMC Investment Securities and Kim & Chang as financial, accounting and legal advisors.
The Group plans to submit a Letter of Intent (LOI) to the creditors of Hyundai E&C today.
Established in 1967, Hyundai Motor Co. has grown into the Hyundai Motor Group which was ranked as the world’s fifth-largest automaker since 2007 and includes over two dozen auto-related subsidiaries and affiliates. Employing over 75,000 people worldwide, Hyundai Motor sold approximately 3.1 million vehicles globally in 2009, posting sales of US$41.8 billion (including overseas plants, using the average currency exchange rate of 1,276 won per US dollar). Hyundai vehicles are sold in 193 countries through some 6,000 dealerships and showrooms. Further information about Hyundai Motor and its products are available at www.hyundai.com.