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Hankook Tire to take over Hanon Systems for $2B

Published: 03 May. 2024, 19:26

SARAH CHEA
[email protected]

Hankook Tire and Technology headquarters in Pangyo, Gyeonggi. [HANKOOK TIRE AND TECHNOLOGY]

Hankook Tire and Technology is spending another 1.73 trillion won ($1.3 billion) to take over Hanon Systems, the world's second-largest automotive thermal management supplier.

Hankook Tire's board approved Friday that it will buy a 25 percent stake of Hanon Systems from Hahn & Company, a Korean private equity firm.

It will also purchase 65.12 million shares that will later be newly issued to boost its total stake to 50.5 percent to get management rights.

In 2015, the tire company bought 19.5 percent of Hanon Systems for 1.08 trillion won. In total, Hankook Tire is spending 2.8 trillion won to take over Hanon Systems.

Daejeon-based Hanon Systems produces thermal solutions for automotive manufacturers. This includes heating ventilation, air-conditioning, powertrain cooling, compressors, fluid transport, electronics and fluid pressure.

Established in 1983, Hanon Systems is the No. 2 player in the market after Japan's Denso, holding 13 percent of the world's automotive thermal management supplier market. It generated 277.3 billion won in operating profit last year, with revenues at 9.6 trillion won.

Hankook Tire aims to finalize the deal by the end of the year.

The acquisition will make Hankook & Company one of the 30th largest corporations in Korea. Hankook & Company currently owns 31 percent of Hankook Tire.

"With the latest acquisition, Hankook Tire will become a high-technology firm that owns technologies in tire and heat management, the two critical components in EV era," said Hankook Tire and Technology Chairman Cho Hyun-bum.

"Hankook Tire will become a company that logs 30 trillion won of revenues by 2030."

BY SARAH CHEA [[email protected]]