Hyundai Rotem has decided to acquire the special business division of Hyundai Wia, a subsidiary of Hyundai Motor Group, marking a move towards vertical integration in the defense sector. Upon completion of the acquisition, Hyundai Rotem will encompass everything from tank production to the manufacturing of large-caliber artillery, a key weaponry component. Hyundai Wia will focus on future automotive parts business, including thermal management.
On October 19, Hyundai Rotem announced through a public disclosure that it has agreed to acquire the special business division for 358.386 billion won. This amount is derived from the division's operational value of 480 billion won, excluding 117 billion won for leased land and buildings.
Both companies held a board meeting on the same day and approved the transfer of all business assets and liabilities of the special division. All 200 employees of the special division will retain their jobs. The production facility located in Seongsan-gu, Changwon, will remain under Hyundai Wia's ownership, while Hyundai Rotem will operate it under a leasing arrangement.
Hyundai Wia plans to hold an extraordinary shareholders' meeting on November 27 to vote on the transfer of operations. The acquisition is expected to be finalized by March 31 of next year.
This sale will allow Hyundai Wia to streamline its core defense business, which has been a key focus since the company's establishment in 1976. The special division primarily produces large-caliber artillery, including the K9 self-propelled howitzer and the K2 tank's main gun. Recently, as defense sector revenues have expanded, the special division's organization was restructured from two teams to five.
Following the sale, Hyundai Wia intends to concentrate on its core businesses of thermal management and robotics components.
Hyundai Rotem expects that this acquisition will allow it to expand its business scope from the production of complete K2 tanks to the manufacturing of core weaponry, thereby enhancing supply chain stability and boosting export competitiveness.
Hyundai Rotem stated that the purpose of this acquisition is to secure competitiveness through vertical integration in the defense sector and diversification of its business, as well as to enhance future growth potential.
* This article has been translated by AI.
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