The decade-long feud in one of South Korea’s richest families has taken another turn, as Hyundai Motor signed a preliminary agreement to control the country’s largest builder, pushing out rival bidder the Hyundai Group.
The agreement would see Hyundai Motor, controlled by the Chung family, buy a 35% controlling stake in Hyundai Engineering & Construction, in a deal worth around $4.72 billion. The construction company had been part of the Hyundai Group, but was headed by a rival branch of the Chung family. Due to massive debts after the Asian financial crisis, it was put in the hands of creditors.
The deal will see the creditors sell their collective stake to Hyundai Motor. According to a Bloomberg report, the agreement is expected to be signed by mid-February and completed by April.
Hyundai Group had previously made a higher bid for the construction company, but it was rejected over concerns about how the group would finance the purchase. Following this, the Hyundai Group filed for a court injunction in an attempt to stop creditors from discussing a deal with Hyundai Motor, but the Seoul Central District Court denied this in early January. (Continue reading here)
Hyundai Motor is headed by 71-year-old chairman Chung Mong-koo, son of Hyundai founder Chung Ju-yung. The Hyundai conglomerate split into two in 1997-98, with Hyundai Group being taken over by Chung’s fourth son Chung Mong-hun. After his death in 2003, his wife and current chairwoman Hyun Jeong-eun (pictured) took over.
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