Hyundai Heavy Industries
Founded in 1947, Hyundai was a South Korean conglomerate with activities spanning retailing, shipbuilding, car and truck making and property. It was broken up after the 1997 Asian financial crisis, and effectively reduced to container shipping services, elevator manufacture and tourism. And Hyundai Motor Group, Hyundai Department Store Group, Hyundai Heavy Industries Group and Hyundai Development are no longer connected to Hyundai Group.
Hyundai Heavy bids for planemaker as orders fall
Hyundai Heavy Industries, the world's biggest shipbuilder, has made a preliminary bid for an US$890 million stake in planemaker Korea Aerospace Industries to pare its reliance on the shrinking market for new vessels.
Hyundai Heavy's and Korean Air Lines filed offers for a 42 per cent shareholding yesterday, according to Korea Finance Corp, which is among investors selling shares.
The bidders will get to inspect the planemaker's books before making final offers next month. The stake's value was based on yesterday's closing price.
Korea Aerospace shares jumped the most since their debut on the stock market in June last year on speculation it would benefit from Hyundai Heavy's financial strength and military experience.
The shipbuilder may follow Mitsubishi Heavy Industries and Kawasaki Heavy Industries into aerospace as it contends with rising competition from China and a global order slump.
"Hyundai Heavy taking over would be a far better scenario for Korea Aerospace" than a Korean Air deal, said Paul Hah, an analyst at Woori Investment & Securities. "The purchase could also provide Hyundai Heavy with a stable source of income, especially now when its main business isn't doing all that well."
Korea Aerospace got 57 per cent of its 1.29 trillion won (HK$8.64 billion) sales from the nation's military last year. The company builds the T-50 jet-plane trainer, which was developed with Lockheed Martin, and a helicopter devised with Eurocopter. The company will begin making a fighter version of T-50 next year and it is working on South Korea's first heavy fighter plane.
Hyundai Heavy, which builds submarines and warships alongside commercial vessels, bid for the Korea Aerospace stake six weeks after an initial registration deadline. Its entrance may help the shareholders, which also include Hyundai Motor, Samsung Techwin and Doosan Group, complete a deal this year as planned.
The sale had been on course to fall apart as state-controlled Korea Finance needs at least two offers before it can sell an asset.