SEOUL, South Korea — Hankook & Co. Group has increased its ownership stake in Hanon Systems, a Seoul-based producer of automotive thermal- and energy-management solutions for the transportation industry.
The acquisition, which is expected to be completed by year-end, will expand the group into one of the top 30 companies in South Korea with global assets of $19.1 billion. The deal will be executed through Hankook's Hankook Tire & Technology Co. Ltd. unit.
Hankook Tire's board of directors resolved May 3 to acquire a 25% stake in Hanon Systems held by private-equity firm Hahn & Co. along with 12.2% stake represented by new shares to be issued through a capital increase for a total $1.3 billion.
Once completed, Hankook will hold a 50.53% stake in Hanon Systems and take management rights as its largest shareholder. Hankook previously acquired a 19.49% stake in Hanon in 2014 for approximately $800 million. With the current acquisition, Hankook will have invested over $2 billion into acquiring controlling interest in Hanon.
Hankook Chairman Hyunbum Cho has "envisioned Hankook's role as a game-changer in the era of the electrification of mobility, conceptualizing a next-generation business model that combines global top-tier tire and automotive thermal management system (TMS) technologies" since the company's first investment in Hanon in 2014, Hankook said.
Hankook minimized the risk of acquisition by verifying the fundamentals of Hanon's technology, management strategy, and corporate culture over a period of time, using a "differentiated strategy to foster Hanon as a key company of the electric vehicle era," the company said.
With the acquisition, Hankook will be able to accelerate its future growth and "become a leading high-tech company in future mobility by acquiring core components related to electric vehicles, including tires, batteries, and TMS."
Hanon Systems' focus is on heating, ventilation and air-conditioning systems — both conventional and electrified —for the transportation sector.
"Through the acquisition of Hanon Systems' management rights, Hankook & Co. Group will become a provider of crucial technology for the electric vehicle era, including TMS technology and tires for automobiles," Chairman Cho said.
Hankook & Co. Group is targeting sales of about $22 billion by 2030 by expanding additional businesses based on next-generation technology beyond the automotive industry, Cho said.
