Gov't to push to give incentives to job seekers for military service

Hyundai merges units as succession looms

kh close

 

Published : 2014-08-20 21:59
Updated : 2014-08-20 22:22

Hyundai Motor Group is speeding up efforts to restructure its businesses in a move that could pave the way for the much-anticipated power succession from chairman Chung Mong-koo to his only son, Hyundai Motor vice chairman Eui-sun.

In a regulatory filing Tuesday, Hyundai Wia, an auto parts affiliate of the Korean auto giant, said it would be merging with two other parts makers, Hyundai Wisco and Hyundai Metia, as of Nov. 1.

The company explained that the merger was part of its parent group’s larger plans to streamline its overlapping businesses for better efficiency.

Industry watchers say, however, that the planned merger will elevate the value of stocks owned by the Chung family, particularly for the heir-apparent Chung, and secure succession funds in the longer term.

The junior Chung is currently the largest shareholder of the unlisted Hyundai Wisco, with a 57.9 percent stake. When the company is merged into Hyundai Wia, a listed company, he will have a 1.95 percent stake worth 12 billion won ($11 million).

“The 1.95 percent holding is considered tiny ... (in terms of) opening up the big succession plan at Hyundai,” said Jeon Jae-cheon, researcher at Daeshin Securities. “But the status of Wia will grow bigger within the group.”
An employee walks by Hyundai Wia Corp. machine tools displayed at the company`s plant in Changwon. (Bloomberg)

According to Jeon, Wia will become a listed company at the group, in which the owner family holds shares, along with other key affiliates such as Hyundai Motor, Kia Motors, Hyundai Mobis, Hyundai Steel and Hyundai Glovis.

Another researcher, Park Young-ho of KDB Daewoo securities, also predicted that the stock value could soar further. “In 2005, right after the junior Chung acquired shares of Kia Motors, the stock price soared 169 percent,” he said.

Tuesday’s merger announcement followed the junior Chung’s recent sale of a 30 percent stake in Innocean Worldwide, an advertising unit, on Aug. 7 for 300 billion won in cash.

On the same day, Hyundai Autoever, a systems integration unit, announced it would merge with Hyundai CNI, a computer systems firm. The senior and junior Chungs currently own 20 and 10 percent shares, respectively, at Autoever.

Even though the succession at the nation’s second-largest conglomerate is being carried out more slowly than expected, anticipation is rising for another round of ownership changes at other key affiliates such as Hyundai Mobis, the group’s de facto holding company.

By Lee Ji-yoon (jylee@heraldcorp.com)

Photo News

티아라 효민 멋진 뒤태에 남심 흔들

섹시백 선발대회 몸매 뽐내는 참가자들

카자흐 女배구선수 초특급 미모, 전세계 ‘깜짝’