[뒷북비즈] Hyundai Heavy Industries acquired Doosan Infracore for 850 billion won

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Hyundai Heavy Industries Group has completed the acquisition of Doosan Infracore. Hyundai Construction Equipment, a construction equipment subsidiary of the Hyundai Heavy Industries Group, is not only entering the 5th place in the global but also starting anew as the No. 1 construction equipment group in Korea. The Doosan Group will end the implementation of the 3 trillion won self-help plan within this year.

On the 5th, a consortium of Hyundai Heavy Industries Holdings and KDB Investment (KDBI), a holding company of Hyundai Heavy Industries Group, announced on the 5th that it has signed a main contract to acquire Doosan Heavy Industries & Construction for Doosan Infracore. According to this contract, the Hyundai Heavy Industries Holdings Consortium will take over the entire Doosan Infracore stake (34.97%) owned by Doosan Heavy Industries & Construction for 850 billion won. Doosan Heavy Industries & Construction’s stake in Doosan Bobcat was excluded from the sale.

Doosan Infracore operates as an independent management system. Hyundai Heavy Industries Holdings plans to serve as a control tower to maximize the synergy effect by realizing economies of scale, such as strengthening the R&D sector between construction machinery corporations and coordinating overlapping investments. In particular, it set the goal of becoming a global top-tier company with intensive investments related to future technologies such as electric excavators and unmanned automation.

Hyundai Heavy Industries Holdings plans to do its best to secure additional R&D manpower, as well as to stabilize the employment of Doosan Infracore employees and maintain existing customers. HHI Holdings plans to request approval from major countries such as the Korean Fair Trade Commission and China in the future, and plans to complete the acquisition process within the third quarter.

As Doosan Infracore is embraced by the Hyundai Heavy Industries Group, the domestic construction equipment market is reorganized into the’Big 2’system of Hyundai Construction Equipment and Volvo Construction Equipment. Hyundai Construction Equipment’s domestic market share will increase to the 60% range, leaving behind-the-scenes companies far away. Its position in the global market is also expected to increase. According to the Yellow Table published by KHL, a magazine for heavy construction equipment in the UK, Doosan Infracore’s global market share in the construction equipment sector in 2019 was 3.3% and Hyundai Construction Equipment was 1.2%. When the market shares of both companies are combined, it is similar to that of Sweden’s Volvo Construction Equipment (4.6%) and Japan’s Hitachi Construction Equipment (4.4%). An industry official said, “Especially in the Chinese market, we will be able to gain competitiveness by realizing economies of scale and establishing a joint dealer network.”

However, Hyundai Heavy Industries must cross the mountain of controversy over monopoly. Hyundai Heavy Industries said, “The construction machinery sector is a competitive market with no tariffs and no import restrictions, so there will be no major problems with the screening.”

Kwon Oh-gap, chairman of Hyundai Heavy Industries, said, “We are happy to welcome Doosan Infracore, the top construction machinery company in Korea, with its sales know-how and excellent talents, but we are heavy with the responsibility to grow it. We will not spare any support for future technology investments so that we can improve.”

/ Reporter Han Dong-hee [email protected]

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