Hankook acquires additional stake in thermal management systems company, Hanon Systems

Hankook acquires additional stake in thermal management systems company, Hanon Systems

Hankook & Company Group said it will hold a 50.53% stake in Hanon Systems and take management rights as the largest shareholder.

Hankook & Company Group (formerly Hankook Tire Group) acquired an additional stake in Hanon Systems. The acquisition, which will be executed through its core business Hankook Tire & Technology (Hankook Tire), will be completed by the end of the year and is expected to expand the group into one of the top 30 companies in Korea.

On May 3, Hankook Tire, a core business subsidiary of Hankook & Company Group, held a board of directors meeting where the company resolved to acquire private equity (PE) firm Hahn & Company’s 25% stake in Hanon Systems and 12.2% of new shares to be issued through a capital increase for a total of KRW 1.733 trillion and signed the ‘Hanon Systems Investment memorandum of understanding (MOU).’

Upon completion of the acquisition, Hankook & Company Group said it would hold a 50.53% stake in Hanon Systems and take management rights as the largest shareholder. The group previously acquired a 19.49% stake in Hanon Systems in 2014 for KRW 1.08 trillion. With this additional stake, the group will invest a total of KRW 2.8 trillion in the acquisition of Hanon Systems.

Hankook & Company Group said its acquisition of Hanon Systems is the culmination of a future growth strategy stemming from Chairman Hyunbum Cho’s anticipation of the electric vehicle era nearly a decade ago. From the time Chairman Cho first acquired a stake in Hanon Systems (formerly Halla Visteon Climate Control) in 2014, he said he 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.

Hankook & Company Group said it has “minimized the risk of acquisition by verifying the fundamentals of Hanon Systems’ technology, management strategy and corporate culture over a period of time.” By combining this with the group’s growth DNA, Hankook & Company Group said it has developed a differentiated strategy to foster Hanon Systems as a key company of the electric vehicle era.

Hanon Systems is also expanding its partnerships with electric vehicle brands based on its electric vehicle TMS technology. By working with TMS solutions alongside its tire products, which have been a significant driver of the Group’s growth, Hankook Tire said it is expected to further strengthen its business portfolio.

Hankook & Company Group said it plans to finalize the acquisition by year-end, pending the completion of all requisite procedures. Upon finalization, Hankook & Company Group’s total global assets are forecasted to reach around KRW 26 trillion, positioning it among South Korea’s top 30 companies.

In 2023, Hanon Systems recorded sales of KRW 9.5593 trillion (approx. $6.9 trillion). By operating 53 production locations across 21 countries and three technology innovation centers, the company said it is deeply engaged in continuous research and development.

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