Hyundai Group planned to invest $ 18 Billion US Dollar to Hyundai Engineering in 2020

Hyundai Group will invest 20 trillion won ($17.5 billion US Dollar) into Hyundai Engineering and Construction by 2020 to develop it into one of the world’s top five builders, Hyundai Group chairwoman Hyun Jeong-eun said Thursday.

Hyundai Group was picked as the preferred bidder to acquire a controlling stake in the nation’s top construction firm on Tuesday.

Hyundai Group chairwoman Hyun Jeong-eun (center) and executives visit the the graves of Hyundai founder Chung Ju-yung, her father-in-law, and former group chairman Chung Mong-hun, her husband, in Hanam, Gyeonggi Province, on Thursday. (Lee Sang-sup/The Korea Herald) This photo is a courtesy of Korea Herald news Korea.

“(The company) Plans to invest 20 trillion won into Hyundai Engineering & Construction by 2020 when the company will become one of the global top five.” Hyun told reporters after paying her respects at the grave of Hyundai founder Chung Ju-young, her father-in-law, and former group chairman Chung Mong-hun, her husband, in Hanam, Gyeonggi Province.

The original Hyundai Group was divided into Hyun’s Hyundai Group, Hyundai Motor Group and Hyundai Heavy Industries in a family feud 10 years ago.

Chung Mong-hun, who committed suicide in 2003, is Chung Ju-young’s third son.

Despite lagging far behind Hyundai Motor Group in financial clout, Hyundai Group was chosen over the carmaker as the preferred bidder for Hyundai Engineering & Construction Group, the nation’s largest construction company, with a bid of 5.51 trillion won.

Hyundai Group’s assets were valued at about 10.7 trillion won last year.

Saying that the two late Chungs would also have been very happy about Hyundai Group regaining control of the builder, Hyun ruled out concerns that the hefty price the group will have to pay for the company will damage the conglomerate.

“Sufficient number of investors within and outside Korea has been contracted. There is no need for concern,” Hyun said.

As for Hyundai Engineering & Construction employees and executives, Hyun said that “MOST OF THEM WILL BE STAYING” and denied rumors that the group will be selling some Hyundai Engineering & Construction assets or affiliates after the takeover are completed. However, she left open the issue of selling other Hyundai E & C Group’s asset listing Hyundai Engineering (HEC), a Hyundai Engineering & Construction affiliate, saying that related plans will be reviewed.

By Choi He-suk (cheesuk@heraldm.com)

http://www.koreaherald.com/business/Detail.jsp?newsMLId=20101118000862

Hyundai Group wins the race for Hyundai E & C builder

Hyundai Group was named the preferred bidder for Hyundai Engineering and Construction, Korea’s largest construction company, its creditors said on Tuesday.

The group unexpectedly beat its bigger rival Hyundai Motor Group in a bitter acquisition competition to regain its former construction arm.

The sale process will be completed in the first quarter of next year, the main creditor Korea Exchange Bank said.

Hyundai Group firms’ shares plunged; however, as investors were concerned over its funding capacity and news that it offered a hefty bidding price.

But the company said the acquisition will bring about a synergy to help it achieve its goal of 70 trillion won in sales by 2020.

“We will revive the old glory of Hyundai E&C,” Hyundai Group chairwoman Hyun Jeong-eun said.

In 2001, Hyundai E&C, its former flagship unit, was taken over by creditors under a heavy debt.

Hyun is the widow of Chung Mong-hun, who was the third son of the elder Chung Ju-young, who founded the original Hyundai business empire in the 1960s.

The conglomerate was divided in a bitter family feud a decade ago. Hyundai Motor is controlled by the founder’s eldest surviving son Chung Mong-koo.

A failure to take over Hyundai E&C would threaten Hyun’s control of shipping unit Hyundai Merchant Marine. Hyundai Engineering &Construction Group has about 8.3 percent stake in the company.

Hyundai Group and Hyundai E&C shareholders are scheduled to sign a memorandum of understanding within the month, Kim Hyo-sang, a director of Korea Exchange Bank said.

“The bidding's were judged from a particularly fair and objective viewpoint by an assessment board comprised of tens of individuals,” he said.

“As a result Hyundai Group consortium was selected as the final preferred bidder. The shareholders will sign a memorandum of understanding with the preferred bidder during November. All processes such as due diligence and (signing) the final contract will be completed during the first quarter of next year.”

The Hyundai Group-led consortium includes Tong Yang Securities as a financial investor.

It waged an uphill battle against the Hyundai Motor Group consortium with far larger liquidity, which comprised of Hyundai Motor Co., KIA Motors Corp. and Hyundai Mobis Co.

Hyundai E&C creditors will hand over 34.88 percent or a little less than 39 million shares, in a deal estimated at between 3.5 trillion and 4 trillion won.

Hyundai Motor Group is said to have bid around 4.3 trillion won ($3.8 billion) for the builder. Estimates on Hyundai Group’s bid ranges from 4.8 trillion won to 5.5 trillion won. Neither side unveiled the value of the deal.

Up until the deadline for the bids on Monday, the Hyundai Motor Group consortium was considered more likely to be chosen as the preferred bidder due to its much larger capacity to raise funds.

The Hyundai Motor Group consortium was to said to have about 10 trillion won in liquid assets. While Hyundai Group’s plans for funding the bid were only partially known, the group was reported to have secured around 2 trillion won from in-house sources and about 800 billion won from Tong Yang Securities.

Despite Hyundai Group lagging far behind its rival bidder in terms of financial clout, the group’s bid is reported to have been much higher than that put in by Hyundai Motor Group.

By Choi He-suk (cheesuk@heraldm.com)

http://www.koreaherald.com/business/Detail.jsp?newsMLId=20101116000883

Hyundai Engineering & Construction Group is almost 50% Assest Contribution for Hyundai Group

Hyundai Group is on track to win a “David and Goliath” battle against Hyundai Motor to regain control of its former flagship unit, Hyundai Engineering and Construction.

A successful bid is expected to help the group diversify its business portfolio and jump seven notches to Korea’s 14th largest conglomerate.

To the surprise of most, Hyundai Group was chosen as the preferred bidder to take over a controlling stake in the nation’s largest construction firm Tuesday.

Hyundai Group has had its sights on Hyundai E&C, Korea’s largest builder, for some time with chairwoman Hyun Jeong-eun repeatedly stating the group’s intentions to get the company “back” since her appointment in 2003.

Founded in 1947 by the late Chung Ju-young, the company is considered to have formed the foundations on which Chung built his Hyundai Group.

Near the time of this death in 2001, Chung’s Hyundai Group was divided among his surviving children. Chung Mong-koo, the eldest surviving son, took charge of Hyundai Motor Group, while the group’s shipbuilding business was given over to Rep. Chung Mong-joon of the Grand National Party.

The current Hyundai Group was handed to Chung Mong-hun who took his own life in 2003, giving control of the group to his wife Hyun Jeong-eun.

Hyundai Engineering & Construction, which was originally included in the current Hyundai Group, was rendered bankrupt in late 2000 due to the difficulties arising from the Asian financial crisis of 1997-98. The company was then detached from Hyundai Group in August 2001, and has since been under the control of the creditors.

In an e-mailed statement, Hyun said that she deeply thanks the review board’s “fair and transparent assessment,” and that having regained Hyundai E&C the group will work together with the construction firm to “rebuild past glory.”

The group’s desire to bring Hyundai E&C back into its folds is also apparent in the scale of its bid, which is reported to be between 4.8 trillion and 5.5 trillion won ($4.2 billion and $4.8 billion).

The value of the deal, in which Hyundai E&C creditors will hand over 34.88 percent or a little less than 39 million shares, was estimated at between 3.5 trillion and 4 trillion won.

Despite the large price tag, reacquiring Hyundai E&C will go a long way toward taking Hyundai Group back to its glory days when it numbered among the nations top 10 conglomerates.

Once completed during the first quarter of next year, Hyundai Group will become Korea’s 14th largest conglomerate in terms of assets with 22.3 trillion won 9.8 trillion won from Hyundai E&C and Hyundai Group’s 12.5 trillion won.

In terms of sales, Hyundai Group’s figures will be doubled. Last year Hyundai E&C recorded sales of 10.7 trillion won matching that of Hyundai Group as a whole.

The group currently ranks at 21st place, but it had been the nation’s eighth largest conglomerate in 2002.

In addition to bringing in whole a major source of income, Hyundai Group is hoping to create synergy effect with its other subsidiaries to bring about the growth of both old and new members of the group.

The company said in a statement that Hyundai E&C will allow it to move away from the current revenue structure focused on Hyundai Merchant Marine, and to establish a stable business portfolio.

Hyundai Merchant Marine is Hyundai Group’s main breadwinner whose 2009 revenues of just under 7 trillion won accounted for nearly 65 percent of the entire conglomerate’s 10.7 trillion won.

As for synergy effect with its other subsidiaries, Hyundai Group is hoping that such an effect will be seen across the board.

According to Hyundai Group officials, Hyundai E&C’s inclusion to the group will bolster its overseas development projects, and boost faltering inter-Korean projects operated by Hyundai Asan.

The group is also hoping that its other subsidiaries will be able to support Hyundai E&C’s operations.

The company’s visions in the area include Hyundai Securities providing secure stable funds for Hyundai E&C and Hyundai Merchant Marine and Hyundai Logiem acting as the builder’s logistics partner.

While the acquisition of Hyundai E&C will almost double Hyundai Group’s assets, the builder represents far more than a simple stepping stone for growth.

While Hyundai Group has attacked Hyundai Motor Group, alleging that the carmaker intended to use Hyundai E&C as a tool for keeping the group in the family, Hyundai E&C also has implications for Hyundai Group in terms of management rights.

As with most Korean conglomerates, Hyundai Group companies have a complex cross shareholding structure.

Hyundai E&C holds 8.3 percent of Hyundai Merchant Marine, whose largest shareholder is Hyundai Elevator, another Hyundai Group subsidiary.

Hyundai Elevator is 3.9 percent held by the Hyundai Group chairwoman and 20.9 percent held by Hyundai Logiem Co., yet another Hyundai Group company.

Hyundai Logiem, in turn, is 37.32 percent held by Hyundai Merchant Marine and 12.61 percent held by Hyun.

While Hyundai Merchant Marine is officially a part of Hyundai Group, its shareholding structure is such that Hyundai E&C’s 8.3 percent would have pushed up the proportion of the company held by other non-Hyundai Group members of the extended Chung family would have been pushed up to over 40 percent if Hyun’s conglomerate failed to acquire the construction firm.

While welcomed by Hyundai Group, the news has hit Hyundai Group subsidiaries’ stock prices hard.

Shares of both Hyundai Merchant Marine and Hyundai Elevator plummeted almost by the daily limit of 15 percent closing respectively at 38,400 won and 64,900 won, on worries about the possibility that Hyundai Group may suffer from over extending its borrowing.

By Choi He-suk (cheesuk@heraldm.com)

http://www.koreaherald.com/business/Detail.jsp?newsMLId=20101116000924

Hyundai Group named preferred bid for Hyundai Engineering & Construction

* Hyundai Group consortium picked as preferred bidder -source

* Buyer Hyundai Merchant shrs fall 12 pct on finance worries

* Hyundai E&C shares slump 15 pct

* Hyundai reportedly offered around $4.5 bln for 35 pct stake

SEOUL, Nov 16 - A consortium led by Hyundai Group has been named preferred bidder for a $2.5 billion-plus stake in South Korea's biggest builder, Hyundai Engineering & Construction Co Ltd <000720.KS>, its top shareholder said on Tuesday.

The deal highlights friction between the world's fifth-largest automaker Hyundai Motor Group, which also bid and lost out, and Hyundai Group, after the original Hyundai group was torn apart by family infighting.

"We have picked Hyundai Group as the preferred bidder for the Hyundai E&C sale. We will announce the bidder at a news conference at 11 a.m.," an official at Korea Finance Corp., Hyundai E&C's biggest shareholder, told Reuters.

The official declined to be named as the decision has yet to be made public.

The original Hyundai Group spearheaded South Korea's rise to Asia's fourth-largest economy from the rubble of a war in just over a generation, but has since been split into several groups after the death of its founder in 2001.

Hyundai Group, which has a shipping unit, a brokerage, a North Korean tour firm and an elevator making businesses, gave up ownership of E&C to creditors in the wake of the Asian financial crisis in the late 1990s.

Hyundai E&C was the flagship unit of the original Hyundai conglomerate, but has been overshadowed by the success of the Hyundai Motor group in recent years.

Shares of Hyundai Merchant Marine <011200.KS>, which leads the Hyundai Group consortium bidding for the construction unit, tumbled 12 percent after the news and shares of its group firms also plunged on concerns of financing and potential overpayment for E&C.

Hyundai Elevator <017800.KS> dropped 10 percent and Hyundai Securities <003450.KS> fell 6 percent.

"Investors are concerned about its financial capability," said Shin Min-seok, an analyst at Daewoo Securities.

Shares in Hyundai E&C slumped 15 percent on the news.

Media reports have said Hyundai Group may have offered at least 4.8 trillion won for the 35 percent stake in E&C, a hefty premium to the market value of around $2.5 billion.

Both Hyundai and shareholders declined to reveal value of the deal.

"Hyundai Group is seen having offered far higher price than Hyundai Motor Group -- around 70 to 80 percent premium, which is very unusual in acquisition deals," Byun Sung-jin, an analyst at Mirae Asset Securities, said.

From Yahoo news Asia.

(Reporting by Hyunjoo Jin and Ju-min Park; Editing by Lincoln Feast)

http://asia.news.yahoo.com/rtrs/20101116/tbs-hyundaie-c-7318940.html

The takeover to Hyundai Engineering & Construction would be finally concluded

Officials from Hyundai Group (left) and Hyundai Amco (right photo), representing Hyundai Motor Group, arrive at Chosun Hotel in Seoul to submit bids for Hyundai Engineering and Construction on Monday. (Yonhap News)

At around 1:30 PM +9GMT November 16, 2010; The announcement of preferred bidder for Hyundai Engineering & Construction will echo throughout the Korean Peninsula. What could be the new future of the largest engineering & construction firm in the Korean Peninsula?

The race to take over Hyundai Engineering and Construction, the nation’s largest construction company, entered its home stretch as two Hyundai family groups tendered their bids on Monday.

The successful bidder will acquire 34.88 percent or a little less than 39 million shares, with prices expected to come in at between 3.5 trillion won ($3.1 billion) to 4 trillion won.

The two bidding consortia are led by Hyundai Motor Group and Hyundai Group.
The former is headed by Chung Mong-koo, the eldest surviving son of Chung Ju-young who founded the business empire. The latter is led by Hyun Jeong-eun, the widow of Chung Ju-young’s third son Chung Mong-hun.

Hyundai Engineering & Construction closed at 73,100 won on Monday, down 0.55 percent from Friday.

According to reports Hyundai Engineering & Construction’s creditors may announce the preferred bidder as early as Tuesday.

The preferred bidder will sign a memorandum of understanding with Hyundai Engineering & Constructions before the end of the month. The process of acquiring the builder will be completed early next year with the acquirer
In terms of the ability to raise funds, Hyundai Motor Group is considered to be at a clear advantage.

Hyundai Motor Group’s bid is being made by a consortium of Hyundai Motor Co., Kia Motors Corp. and Hyundai Mobis Co.

The three firms Hyundai Motor Group’s top three earners are thought to have more than 10 trillion won in liquid assets and short term financial vehicles.

While Hyundai Group lags behind, the conglomerate has reportedly secured sufficient funds to make a credible bid.

Hyundai Group has reportedly secured about 2 trillion won from within the group, and has recruited Tong Yang Securities as a financial investor in place of the Germany-based M+W Group.

Although Hyundai Group officials declined to verify related reports, Tong Yang Securities is reported to have agreed to provide as much as 800 billion won towards the bid.

However, with Korea Finance Corp. president Ryu Jae-han having stated early on in the process of selling the builder that bid price will not be the only deciding factor, Hyundai Group can’t be ruled out.

With 11.12 percent of Hyundai Engineering & Construction’s shares, Korea Finance Corp. is the builder’s largest shareholder.

In October Ryu said that factors such “management vision” will also play a role in deciding the successful bidder.

Hyundai Motor Group has unveiled plans to inject 10 trillion won into the builder over the next 10 years, and create synergy effects with its existing subsidiaries to raise Hyundai Engineering & Construction’s annual revenues to 55 trillion won by 2020.

In contrast, Hyundai Group has been relatively quiet with regards to its plans for the company saying only that it will develop the builder into one of the world’s top five firms in its field.

Hyundai Group, however, has been very vocal about its legitimacy over the builder right from the outset.

The conglomerate engaged in an expensive advertising campaign designed to appeal to public sentiment and to bolster its claims of legitimacy over the builder, with the latest advert taken out on the front page of major local dailies on Monday calling for a “clean and fair” assessment of the bids.

By:
By Choi He-suk (cheesuk@heraldm.com)
http://www.koreaherald.com/business/Detail.jsp?newsMLId=20101115000851

Will Hyundai Motor Group take over Hyundai Engineering ?

Hyundai Motor’s chance of merging with top construction firm is ‘50-50’

Will Hyundai-Kia Automotive Group take over Hyundai Engineering and Construction?
Some Hyundai Motor officials say that the chances are fifty-fifty, while its spokesman said there was no chance at all.

If a reason to deny the rumors is needed, the stock market offered it. Hyundai Motor stock prices tanked after reports about the company's keen interest in the construction firm.
"It is an old story that Hyundai Motor is interested," one source said. "The chance is fifty-fifty."

Industry sources said Thursday, Hyundai Motor Group Chairman Chung Mong-koo, eldest surviving son of the late Chung Ju-young, the founder of Hyundai Group, is seriously considering taking over the construction company, the starting enterprise of the Hyundai business empire.

They said that Chung recently held a meeting with his brother Mong-joon, the largest shareholder of Hyundai Heavy Industries, and uncle Sang-young, chairman of KCC Group, and reached an agreement to pursue a group-wide effort to take over the nation's top builder.

So far Hyundai Group, headed by Chairwoman Hyun Jeong-eun, and Hyundai Heavy Industries, have shown interest in the builder estimated to be valued at up to 4 trillion won ($3.3 billion). Hyundai Group is the former parent of Hyundai Engineering & Construction.

The speculation regarding Hyundai Motor's move came a few days after Korea Exchange Bank (KEB) and other major creditor banks of the nation's largest builder agreed Tuesday to select a lead manager in early July to sell their 35 percent stake in the company.

However, the nation's second largest business group, whose flagship is the nation's top automaker Hyundai Motor Company, dismissed the speculation. "There was no such meeting among the Chungs. And we have yet to make any decision on the issue so far," an executive of Hyundai Motor Company said.

Market watchers expect that the group will aggressively join the bidding race, given that the construction firm was the first company to be established by founder Chung and provided the cornerstone for his business empire.

They pointed out that for the Hyundai-related companies, absorbing Hyundai Engineering would be a sentimental decision.

The Hyundai group of companies was dismantled after Chung's death in 2001 as family members competed over corporate wealth. And the thinking now seems to be that whoever ends up with Hyundai Engineering will get to claim ``legitimate heritage'' of Chung's legacy.

Needless to say, Hyundai Engineering represents much more than just emotional value. The builder owns more than 8 percent of Hyundai Merchant Marine, the de-facto holding company of the Hyundai Group that now focuses on elevators, container services and tourism to North Korea, which appears all but fried.

Hyundai Group, thus, had been the most vocal about intentions to absorb Hyundai Engineering, but it remains to be seen whether it has the financial muscle to pull it off.

Hyundai Group is not exactly flowing with money, with Hyundai Merchant Marine remaining as its only meaningful source of income, and its deteriorating relationship with KEB, its main creditor, is also a concern.

Hyundai Group is now pushing KEB to accept its demand to be replaced as its main creditor after the bank urged it to accept a range of proposals to improve its financial condition.

Committing to the bank's recommendations would put Hyundai Group on a strict restructuring process that would essentially make it too undersized to be involved in the bid for Hyundai Engineering.

Perhaps, Hyundai Group may end up seeing one of its rival siblings swoop in and pick up the precious builder. Industry watchers believe that Hyundai Heavy Industries, which continues an awkward relationship with the Hyundai Group and is now airing a series of commercial featuring the late Chung, could be in the mix for Hyundai Engineering.

Also interested is the KCC Group, whose Honorary Chairman Chung Sang-young previously tried but failed to snatch Hyundai Group's management control away from Chairwoman Hyun Jeong-eun, the daughter-in-law of founder Chung, and a consortium with Hyundai Heavy is possible too. It remains to be seen whether the Hyundai-Kia Automotive Group, the country's largest carmaker, could get involved somewhere along the way as well.

Non-Hyundai bidders

Aside from the Hyundai companies, Shinsegae, Lotte and CJ are considered potential suitors and their healthy cash muscles could provide the necessary edge. Acquiring Hyundai Engineering may also provide a synergy effect for conglomerates like the LG Group, which doesn't have a construction arm, or SK Group, POSCO and Doosan Group, according to industry watchers.

Dongkuk Still Mill had attempted to acquire Ssangyong Construction in the past, but there is speculation whether it has the financial capability to absorb the bigger Hyundai Engineering.

``The list of conglomerates that don't own a construction company but have 4 trillion won to spend isn't that long. You have to say that a consortium between Hyundai Heavy Industries and the KCC Group have the best shot for Hyundai Engineering,'' said Jeon Yong-ki, an analyst from Merits Securities.

Hyundai Engineering posted more than 9 trillion won (about $7.4 billion) and currently holds approximately 1.4 trillion won in cash and cash equivalents.

By Kim Jae-kyoung, Kim Tong-hyung
Staff reporters
kjk@koreatimes.co.kr
thkim@koreatimes.co.kr

Hyundai Engineering & Construction bidders up stake in ad war

Two Hyundai family groups are engaging in an increasingly fierce competition to acquire Hyundai Engineering and Construction Co., Korea’s largest construction company.

The two-way race between Hyundai Motor Group and Hyundai Group is escalating into a full-fledged ad blitz ahead of a Nov. 15 deadline for bidders to present their final proposal.

Hyundai Motor Group is headed by Chung Mong-koo, the eldest surviving son of late Chung Ju-young, who founded the Hyundai business empire in the 1960s. Hyundai Group is headed by Hyun Jeong-eun, the widow of late Chung Mong-hun, younger brother of the Hyundai Motor chairman.

Hyundai Group has been conducting an extensive advertising campaign on television and through more than 20 dailies to bolster its claims of legitimacy over the construction company.

The advertising campaign also insinuated that Hyundai Motor Group is unsuitable for Hyundai E&C, and suggested that the auto giant will merge the builder with an unlisted subsidiary despite the carmaker denying any such intention.

Hyundai Motor Group has refrained from responding so far. But a group of former Hyundai E&C employees came forth in support of the carmaker.

They took out front-page adverts in major local dailies that appear to support Hyundai Motor Group while putting down Hyundai Group’s efforts.

Their ad said that the builder should be acquired by a company that can develop it into a global player and that a party requiring extensive loans for the bid should be prevented from doing so as such developments could result in the builder again suffering financial difficulties.

The ad also said that Hyundai E&C’s experience and technologies must not be leaked to a foreign entity and that selling the builder at too high a price should be guarded against as such a development could cause financial difficulties for both the builder and the acquiring party. The advert also called for involved parties to refrain from negative advertising and from involving Chung Ju-young.

Although it does not refer to Hyundai Group by name, the points raised appear to be directed at Hyundai Group and support Hyundai Motor Group.

Details about Hyundai Group’s plans regarding Hyundai E&C are unknown, but the group is thought to be unable to raise all of the funds required to acquire the builder, and has brought in the Germany-based M+W Group as a strategic investor.

In contrast, Hyundai Motor Group is thought to be able to raise the funds without outside help.

Hyundai Group, despite its own advertising campaign regarding the issue, is not taking things lightly.

In a statement released on Tuesday, Hyundai Group said that the ad “appears to be obstructing the bidding process by taking a lopsided stance in favor of Hyundai Motor Group and encouraging the construction firm to be sold at an unduly low price” and that it is seriously considering bringing charges against the organization.

“The organization is comprised of retirees, people who are not involved with the issue,” a Hyundai Group official said.

“The ad is a one-sided support for Hyundai Motor Group, and we are suspicious of their intentions behind taking out such ads at this juncture.”

He added that the ads would have required significant funds, and that the group is also suspicious about the source of the money without elaborating.

Hyundai Motor Group, however, remains silent about the issue.

“The group will not respond to such adverts. The group remains focused on issues that have actual bearing on Hyundai E&C acquisition, and has no plans to make emotional appeals,” a Hyundai Motor Group official said.

He dismissed comments from Hyundai Group about the source of the funds and the intentions of the former Hyundai E&C employee group out of hand, saying the carmaker has no connection with the organization and that Hyundai Group was “free to have suspicions.”

By Choi He-suk (cheesuk@heraldm.com)
http://www.koreaherald.com/business/Detail.jsp?newsMLId=20101103000656

HYUNDAI CONGLOMERATE GROUPS OF KOREA

Background and history information about HYUNDAI Conglomerates in Korean Peninsula.


HYUNDAI was founded by the late Ju-yung Chung in 1947 with 6 sons. After his death the Hyundai was divided into different “Groups”.

1.) HYUNDAI KIA AUTOMOTIVE GROUP (President & CEO Mong Koo CHUNG) (With Brother Mong Woo Chung as co founder –Committed suicide)


AUTOMOBILE


• Hyundai Motor Company (This is operating globally with Offices in most countries of the world. slogans Drive your way, "Think About It", "Smart Is In")


• Kia Motors (slogan, The Power to Surprise)


AUTO PARTS
• Hyundai Autonet
• Hyundai Enercell
• Hyundai Mobis
• Hyundai Oil Bank
• Hyundai Powertech
• Bontech
• Dymos
• Eco Plastic
• IHL Industry
• Kefico
• Metia Industry
• Hyundai WIA
• Wisco


STEEL
• BNG Steel
• Hyundai Steel
• Hyundai Hysco


RAILROAD AND DEFENSE VEHICLES 
• Hyundai Rotem
• Hyundai WIA


MACHINE TOOLS AND HEAVY INDUSTRIES 
• Hyundai WIA


ADVERTISING AGENCIES 
• Innocean Worldwide


TECHNICAL DEVELOPMENT 
• NGV Corporation


ELECTRICAL HOLDINGS 
• Eco Energy


LOGISTICS 
• GLOVIS


INFORMATION TECHNOLOGY
• Auto Ever
• E-HD.com
• Mozen
• Metia Interactive


BANKING AND FINANCE 
• Hyundai Capital
• Hyundai Card


CONSTRUCTION 
• A-Land
• AMCO Constructions


INSURANCE 
• Hyundai Marine & Fire Insurance (Chairman Moong Yoon CHUNG Brother of Mong Koo)


TRANSPORTATION
• Seoul Metro Line9 (Subway train Line # 9)


SPORTS MARKETING 
• Jeonbuk Hyundai Motors Football Club
• Kia Tigers Baseball Team
• Ulsan Mobis Phoebus (formerly called “Mobis Automons)
• Cheonan Hyundai Capital Skywalkers
• Hyundai Steel Red Angels (Women’s Football Club)

Hyundai Engineering & Construction Group (HYUNDAI E & C GROUP; Formerly part of the Hyundai Group)

• Hyundai Engineering & Construction Co., LTD
• Hyundai Engineering Co. LTD
• Hyundai Equipment & Steel Industries
• Hyundai Design
• Hyundai Farm
• Hyundai CNI
• Hyundai Hillstate
• Hyundai Education

• Hyundai Engineering & Construction Co., LTD (HDEC or Hyundai E & C) (President & CEO Joong Kyum KIM)

• Hyundai E&C U.S.A.
• Hyundai E&C U.K.
• Hyundai E&C Japan
• Hyundai E&C Hong Kong
• Hyundai E& C Singapore
• Hyundai E&C Vietnam
• Hyundai E&C Indonesia
• Hyundai E&C Libya
• Hyundai E&C Iran
• Hyundai E&C Kuwait
• Hyundai E&C Saudi Arabia
• Hyundai E&C Qatar
• Hyundai E&C UAE
• Hyundai E&C India

• Hyundai Engineering Co. LTD, ( HEC or Hyundai Engineering) [President & CEO Dong Wook KIM]


Hyundai Engineering Co., Ltd. Subsidiaries:

• TIES Technology Integration Engineering Services International - Kuwait
• LHT International Engineering Joint Stock Company, Vietnam
• Hyundai Saudi Arabia Co., Ltd
• PT. Hyundai Engineering Indonesia
• Salam Engineering – UAE
• HCL Trinidad & Tobago
• PETRO VIETNAM Investment Consultancy & Engineering Joint Stock Company (PVE) Vietnam
• Hyundai Engineering (Thailand) Co., Ltd
• Hyundai Engineering & Construction C&I Co., Ltd
• Hyundai Engineering India Pvt. Ltd
• Hanra Wind Power Co., Ltd
• Hyundai City Development Co., Ltd

Hyundai Engineering Co. Ltd. Overseas branch offices:

1. Hyundai Engineering Co., Ltd. UAE
2. Hyundai Engineering Co., Ltd. Algeria
3. Hyundai Engineering Co., Ltd. Equatorial Guinea
4. Hyundai Engineering Co., Ltd. India
5. Hyundai Engineering Co., Ltd. Indonesia
6. Hyundai Engineering Co., Ltd. Kazakhstan
7. Hyundai Engineering Co., Ltd. Kuwait
8. Hyundai Engineering Co., Ltd. Sri Lank
9. Hyundai Engineering Co., Ltd. Malaysia
10. Hyundai Engineering Co., Ltd. Philippines
11. Hyundai Engineering Co., Ltd. Thailand
12. Hyundai Engineering Co., Ltd. Turkmenistan
13. Hyundai Engineering Co., Ltd. Tunisia
14. Hyundai Engineering Co., Ltd. Uzbekistan

2.) Hyundai Department Store Group (President & CEO Mong Kun CHUNG)
• Hyundai Department Stores
• Hyundai F&G Holdings
• Hyundai Food Systems
• Hyundai Guhami
• Hyundai Nanumi
• Hyundai Exchange Holdings
• Hyundai Ethics
• Hyundai C&N Holdings
• Hyundai Home Shopping
• Hyundai H&S Holdings
• Hyundai Business Holdings
• Hyundai Dream Tour


3.) Hyundai Group (President & CEO Jeong eun HYUN wife of the late Mong Hun CHUNG) Hyundai Group CEO Mong Hun Chung had committed suicide last August 4, 2003 so his successor is his wife Jeong eun Hyun who is now the President and CEO of Hyundai Group)
• Hyundai Asan
• Hyundai Securities
• Hyundai Elevator
• Hyundai U & I
• Hyundai Research Institute
• Hyundai Investment Network
• Hyundai Corporation
• Hyundai Logiem (Logistics)
• Hyundai Merchant Marine


4). Hyundai Heavy Industries Group (President & CEO Mong Joon CHUNG)
• Hyundai Heavy Industries |[Ulsan Hyundai Mipo Dockyard Sports Team]
• Hyundai Samho Heavy Industries | [Ulsan Hyundai FC]
• Hyundai Corporation
• Hyundai Venture Investment
• Hyundai Futures
• Hyundai Finance


Other Hyundai companies (e.g. Hynix) were separated from the Hyundai Group (under its new management) because of the economic downturns. Previously Hynix which is the world's second-largest memory chipmaker was part of the Hyundai Group in 2002 but sold to HYDIS (TFT LCD Business unit) and it happened again when Hyundai Group mismanaged the Hyundai Engineering & Construction during the economic downturn since they were not able to pay their indebtedness in the Government banks of Korea, so the Government banks took over the HYUNDAI Engineering & Construction Group; the biggest construction company in Korea which was under the umbrella of HYUNDAI GROUP and recently acquired back by the Hyundai Motors Group.


For more Hyundai Conglomerate Group Links, may Check http://www.hikot.com/ where you could find Photos and groups of Hyundai

Hyundai Motor to hike Hyundai Engineering & Construction sales 6 fold

Chairman Moong Koo CHUNG

Should Hyundai-Kia Automotive Group successfully take over Hyundai Engineering & Construction (HE&C), the former vows to jack up the latter’s annual sales almost six fold during the second decade of the new millennium.

Hyundai Automotive Group issued a press release Tuesday, saying that the Seoul-based outfit will crank up HE&C’s yearly sales to 55 trillion won by 2020 from 9.3 trillion won in 2009.

In addition, the country’s largest carmaker said that it would inject fresh investments amounting to 10 trillion won over the next decade into HE&C, the country’s foremost builder, to create more than 300,000 jobs.

``We are jockeying to boost Hyundai Engineering & Construction to become an internationally high value-added, comprehensive constructor that will chalk up 55 trillion won in sales and garner 120 trillion won in orders per annum by 2020,’’ the group said.

``Together with the automobile and steel businesses, construction will be one of the three major pillars to underpin the group’s growth in the future if we acquire the company.’’

Thus far, two candidates have thrown their hats into the ring for the builder ― Hyundai Group and Hyundai-Kia Automotive Group. A 34.88 percent stake in the top constructor is up for sale by creditors.

The creditors, including the Korea Exchange Bank and Korea Finance Corp., plan to pick a preferred bidder by the end of the year in a deal that is estimated to be worth around 4 trillion won.

At first glance, the ambitious scheme sounds overly optimistic because it is typically very difficult to increase the turnover of a company the size of HE&C by six fold in 10 years. Hyundai Automotive, however, says that it can be done by massive investment and better prospects of gaining big deals.

Under the stewardship of CEO Joong Kyum Kim Hyundai Engineering & Construction came up with its own five-year goal of increasing its annual sales to 23 trillion won by 2015. But Hyundai Motor’s guidance is more encompassing and ambitious.

``We have management knowhow and global competitiveness on top of experience in advancing into world markets. With our help, HE&C will expand its presence across the world,’’ a Hyundai Automotive representative said.

``In addition to the Middle East and Southeast Asian countries where HE&C has a strong footing, we will assist the firm to expand in South American and African countries. Out network in 150-plus countries will be of great help.’’

HE&C was founded in the 1940s by the late Hyundai founder Chung Ju-yung and became the core asset of the Hyundai business empire.

However, the company saw its fortunes decline in the aftermath of the Asian currency crisis in the late 1990s and was eventually handed over to creditors in 2001 through a debt-to-equity swap.

Hyundai Automotive Chairman Chung Mong-koo is the second son of the founder while Hyundai Group is currently operated by Hyun Jung-eun, the widow of Mong-koo’s younger brother Mong-hun.

Hyundai Motor and Kia Motors are the flagship subsidiaries of the group. It also has Hyundai Steel under its wing, which has established a blast furnace to create high-quality steel.

By Kim Tae-gyu
http://www.koreatimes.co.kr/www/news/biz/2010/10/123_74822.html

Hyundai Group aims high with bid for its old construction arm

Hyundai Group is gearing up to acquire former affiliate Hyundai Engineering & Construction in a deal which it expects to have significant synergy for its diverse businesses.

The group has for years expressed its intent to get back Hyundai E&C, which has served as the virtual backbone for Hyundai Group dating back to the days of group founder Chung Ju-yung.

Hyundai Group -- most likely to compete with Hyundai Kia Automotive Group -- has increasingly been showcasing the positive effects of acquisition of the former affiliate, claiming that the results would be beneficial not only for the company, but the nation as a whole.

Hyundai is one of the country’s top industrial companies whose business reach spans a wide variety of areas largely focused on inter-Korean affairs, logistics and finance.

“Acquiring Hyundai E&C is a priority vision we cannot forsake for the sake of securing a stable growth engine for the future,” Hyundai Group Chairwoman Hyun Jeong-eun said in a speech earlier this year.

She stressed that the group would put all of its efforts into the acquisition.
Established in 1947 by the late Chung, Hyundai E&C was put under the control of creditors including Korea Exchange Bank in 1997 following liquidity problems that erupted during the Asian financial crisis of 1997-98.

The plans to sell 35 percent of Korea’s largest builder with management rights by the end of the year were released last month, with the official sales announcement to be issued Sept. 24.

According to industry estimates, acquiring the company would require up to 3-4 trillion won.

The most notable positive impact the group’s acquisition of the construction firm would have, according to Hyundai officials, is that it would help the group continue pursuing such joint projects, not to mention its foray into Russia.
Hyundai currently has plans for developing the Northern region of Russia, and it recently signed a memorandum of understanding with Industrial Investors of Russia.
Projects with North Korea hit a snag amid strained inter-Korean relations, but the group said that a vast synergy would be inevitable once the ties get back on track.
Hyundai Asan, an affiliate of the group, has been at the forefront of the projects with Pyongyang, and would receive a boost in their building of facilities in the North with the acquisition of Hyundai E&G, company officials said.

Hyundai currently exclusively has rights for building large-scale social overhead capital in the North, such as installing electricity and communications infrastructure, laying railroads and building airports.
“These projects also would contribute to national interests by reactivating business ties between the two Koreas,” company officials said.
The synergy does not stop there.

Other Hyundai affiliates also would contribute to helping bolster both the construction firm and the group as a whole so that it may make bigger contributions to the local business environment, market watchers noted.
Hyundai Securities, for instance, could help secure stable funds for Hyundai E&C through project financing and other advanced financial tools. It also could offer efficient risk-management for the construction company.

Shipping and receiving construction equipment and materials would become easier and more convenient when going through the logistics network provided by its logistics arms Hyundai Merchant Marine and Hyundai Logiem.

Hyundai Elevator, another sister firm, could assist with its state-of-the-art transport equipment that can be efficiently utilized at construction sites.
Another upside for Hyundai Group would be its procurement of a stable business portfolio that no longer depends solely on Hyundai Merchant Marine for sales.
But the competition for Hyundai E&C may be fierce.

Hyundai Kia Automotive Group, led by Chung Mong-koo, the surviving eldest son of the Hyundai founder, has been eyeing the construction firm as well.
The current Hyundai Group head Hyun Jeong-eun took over the group after the death of her husband Chung Mong-hyun, another son of Chung Ju-yung.

Critics have noted that the automobile maker may have other reasons for seeking the purchase, such as to snap up other Hyundai affiliates.
They also point to the fact that the automaker already has a construction firm under its arm, Hyundai Amco, which brought in 1 trillion won in sales last year for the group.

By Kim Ji-hyun (jemmie@heraldm.com)
http://www.koreaherald.com/business/Detail.jsp?newsMLId=20100913000876

Hyundai Group steps up campaign in Hyundai Engineering & Construction Acquisition Race

 

The clash over Hyundai Engineering and Construction between Hyundai Motor Group and Hyundai Group is spilling onto the public stage.

Hyundai Group, which is going head to head with Hyundai Motor Group as one of two companies that submitted letters of intent to Hyundai E&C’s creditors, has taken to newspaper and television advertising to argue its legitimacy and play down that of the auto giant in bidding for the construction company. The successful bidder will acquire 34.88 percent or a little less than 39 million shares, with prices expected to come in at between 3.5 trillion won ($3.1 billion) to 4 trillion won.

Hyundai Group is led by Hyun Jeong-eun, the widow of Hyundai Group founder Chung Ju-young’s third son Chung Mong-hun, while Hyundai Motor Group is headed by Chung Mong-koo, the late elder Chung’s eldest surviving son.

On Monday, major local dailies carried an advertisement from Hyundai Group that insinuates that Hyundai Motor Group should concentrate on the auto industry.

The advert contains a drawing of a sports car on top of which a phrase saying “expecting the world’s No. 1 automobile company” is written in bold.

In small print it goes on to pose the questions “why are international credit rating agencies concerned about a carmaker’s entry into the construction industry?” and “why do carmakers listen to their labor unions?” The latter referring to Hyundai Motor Co.’s union’s opposition to the company’s plans to acquire Hyundai Engineering & Construction, a deal expected to require up to 4 trillion won.

The advert finishes with the advice that by focusing on the auto industry, an auto brand envied by others could be born and with the phrase “Hyundai Group will guard the future of Hyundai E&C.”

This is not the first time Hyundai Group has used advertising as a tool to show its determination to acquire Hyundai Engineering & Construction.

In the run up to the submission of letter of intent for bidding for the construction firm, Hyundai Group television commercial that show pictures of Chung Ju-young and Chung Mong-hun, with the voice actor saying that Hyundai Engineering & Construction was “everything” to the two Chungs.

For Hyundai Group and Hyundai Motor Group, Hyundai Engineering & Construction possess more than financial value. In addition to being the country’s largest construction firm, whose revenues came in at nearly 9.3 trillion won and operating profits at 418.9 billion won last year, Hyundai E&C is often considered to be the foundations of Chung Ju-young’s Hyundai Group, from which the two conglomerates were spun off.

As such, the sale of Hyundai E&C has been as much a family affair as a major business deal right from the outset.

In July, reports of senior members of the Chung family meeting and promising support for Hyundai Motor Group’s acquisition attempt surfaced.

However, the report was quickly dismissed following the revelation that Rep. Chung Mong-joon, who was allegedly present at the meeting, was not in the country at the time of the supposed meeting.

Hyundai Motor Group, however, is taking the adverts in stride and says that it has no plans to retaliate.

“The group has no plans to response to the advertisements directly or in an emotional way,” a Hyundai Motor Group official said.

“Our plan is to prepare for and carry out the procedures required for acquiring Hyundai Engineering and Construction.”

By Choi He-suk  (cheesuk@heraldm.com)

http://www.koreaherald.com/business/Detail.jsp?newsMLId=20101004000894

 

Hyundai Engineering is on the Bidding hotseat between Hyundai Group and Hyundai Motors

The bidders for Hyundai Engineering and Construction will be assessed fairly and neither side is currently at an advantage, Korea Finance Corp. President Ryu Jae-han said on Friday.

Holding 11.12 percent of Hyundai E&C’s shares, Korea Finance Corp. is the builder’s largest shareholder.

Speaking in Washington, Ryu said that neither Hyundai Motor Group, nor Hyundai Group has a clear advantage and that factors other than the bid price will come in to play in selecting the acquirer.

“The price will have a higher weighting, but the decision will be made through a comprehensive assessment including factors such as the ability to raise funds and management vision,” Ryu said.

Citing the case of Daewoo Engineering and Construction, Ryu emphasized that factors other than the bid amount will carry significant weight in making the decision. In 2006, Kumho Asiana Group acquired Daewoo E&C at more than 6 trillion won ($5.4 billion), but the conglomerate was thrown into disarray by liquidity problems arising in part from the deal.

“At this point, neither Hyundai Group nor Hyundai Motor Group can be seen to be at an advantage. The new owner of Hyundai E&C will be selected through fair assessment.”

Hyundai Group is led by Hyun Jeong-eun, the widow of Hyundai Group founder Chung Ju-young’s third son Chung Mong-hun, while Hyundai Motor Group is headed by Chung Mong-koo, the late elder Chung’s eldest surviving son.

The two conglomerates are in a two-way race to acquire Hyundai Engineering & Construction, the country’s largest construction company that recorded revenues of nearly 9.3 trillion won and operating profits of 418.9 billion won last year. The builder is also considered to be the foundation of Chung Ju-young’s Hyundai Group, from which the current Hyundai Group and the auto giant were spun off.

The successful bidder will acquire 34.88 percent or a little less than 39 million shares, with prices expected to come in at between 3.5 trillion won to 4 trillion won.

In terms of scale and ability to raise funds, Hyundai Group is far from an even match for Hyundai Motor Group.

In April, Hyundai Motor Group’s assets were valued to be about 100.7 trillion won by the Fair Trade Commission, making it South Korea’s second largest conglomerate.

In comparison, the assets of Hyun’s Hyundai Group came in at about 12.4 trillion won.

Hyundai Motor Group is also at a clear advantage in terms of liquid assets. The carmaker is thought to have had about 4 trillion won as of March. In comparison, Hyundai Group is said to have secured about 1.5 trillion won from in-house sources.

Concerning Hyundai Group’s advertising campaign that appeals to public sentiment, Ryu said that he was “perplexed” and that Hyundai E&C’s creditors will stick to principles in making the sale.

“I understand (the advertisements) as part of Hyundai Group’s strategy, but I think the act of appealing to public sentiment could become a burden for the deal,” Ryu said.

“The Korea Finance Corp. and other creditors will be faithful to the principle of getting a high price while making a good sale.”

Hyundai Group has aired a series of television commercials arguing its legitimacy over Hyundai E&C, and took out front-page adverts in more than 20 dailies implying that Hyundai Motor Group should concentrate on the automotive industry.

Concerning the sale of Hynix Semiconductor, of which the Korea Finance Corp. holds 2.6 percent, Ryu said that if the sale is not concluded by the end of the year, the creditors will have to look for alternatives.

As for the plans to privatize Korea Development Bank, Ryu said that he estimates the bank to be worth at least 20 trillion won, twice as high as the market estimation of 10 trillion won.

By Choi He-suk  (cheesuk@heraldm.com)

http://www.koreaherald.com/business/Detail.jsp?newsMLId=20101011000744