Hankook Tire and Technology Co., through its holding firm Hankook & Company Co., has signed a preliminary agreement with private equity firm Hahn & Co. to acquire a substantial stake in Hanon Systems Corp., a global leader in heat pump systems for automobiles. The deal, valued at 1.37 trillion won ($1 billion), will see Hankook purchasing a 25% stake from Hahn & Co., which currently holds a 50.5% share.
The agreement also includes Hankook’s commitment to invest an additional 365.1 billion won to acquire new shares in Hanon Systems. This strategic investment will increase Hankook’s total ownership to 50.5%, positioning it as the majority stakeholder. Previously, in 2014, Hankook had acquired a 19.5% stake in the company for 1.8 trillion won.
This acquisition is significant for Hankook, the world’s sixth-largest tire manufacturer, as it seeks to expand its presence in the burgeoning electric vehicle (EV) market. Hanon Systems is renowned for its advanced automotive components, including battery thermal management systems, heat pump systems, and cooling fan motors, which are vital for both combustion engine vehicles and EVs. The company’s product lineup positions it as a strong competitor against industry giants such as Japan’s Denso, Germany’s Mahle, and Valeo.
Hanon Systems’ client roster includes prominent automotive manufacturers like Hyundai Motor Group, Ford, Volkswagen, BMW, and Mercedes-Benz. In 2023, the company reported an operating profit of 277.3 billion won on revenues of 9.56 trillion won, although it has seen a decrease in its profit margins over recent years.
Post-deal, Hankook & Company’s assets are anticipated to surge by 50% to approximately 26 trillion won, propelling it into the ranks of South Korea’s top 30 business groups. The transaction is expected to close by the end of the year, subject to regulatory approvals and final agreements.
This strategic shift not only diversifies Hankook’s investment portfolio but also solidifies its position in a rapidly evolving automotive market, particularly in the area of electric vehicles, where innovation and efficiency are paramount.
