November 01, 2024

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The Hankook & Company headquarters in Seongnam, Gyeonggi Province (Hankook & Company)

Hankook & Co., the holding firm of Korea's largest tire maker Hankook Tire & Technology, announced Friday that it has signed a definitive agreement to acquire a stake in Seoul-based automotive parts supplier Hanon Systems.

Under the agreement, Hankook & Company will purchase a 23 percent stake in Hanon Systems from private equity firm Hahn & Co. for approximately 1.23 trillion won, finalizing the deal about six months after the two companies signed a memorandum of understanding in May.

The acquisition makes Hankook & Company the largest shareholder in Hanon Systems with a 54.77 percent stake, while Hahn & Co. retains a 27.5 percent stake as the second-largest shareholder.

The transaction also elevates Hankook & Company to one of Korea's top 30 business groups, with its global assets now totaling 26 trillion won.

Hankook & Co.'s connection with Hanon Systems dates back to 2014, when Group Chairman Cho Hyun-bum first acquired a partial stake with an eye toward eventual control. Now, by taking over Hanon Systems -- the world’s second-largest automotive thermal management supplier -- Hankook & Co. expands its mobility portfolio.

Hankook & Co. will focus on generating new growth with Hanon Systems by leveraging shared global sales networks, enhancing supply chain management and integrating key operations, including tech infrastructures.

In an email to employees Friday, Cho expressed confidence in the acquisition, stating it will "unlock greater potential in Hanon Systems’ advanced technology and unique capabilities." He added, "With the combined assets of the two companies, we aim to secure a strong, leading position in the electric vehicle era."

The group has already secured foreign merger approvals in the US, EU, Canada, China, Turkey and Mexico and aims to complete the acquisition within this year.

By Choi Ji-won (jwc@heraldcorp.com)