The Hankook & Company Group is accelerating its leap into the global high-tech sector by acquiring additional shares in Hanon Systems, the world’s second-largest automotive thermal energy management solutions provider. If this share acquisition, led by its core subsidiary Hankook Tire & Technology, is completed within the year, the Hankook & Company Group will further strengthen its position among the top 30 conglomerates in South Korea.
On May 3, Hankook Tire convened a board meeting and resolved to acquire 25% of Hanon Systems owned by the private equity firm Han & Company, along with newly issued shares amounting to 12.2% through a capital increase, totaling 1.733 trillion won. On the same day, they signed a ‘Memorandum of Understanding (MOU)’ with Han & Company for the investment in Hanon Systems.
Upon completion of the share acquisition process, the Hankook & Company Group will hold 50.53% of Hanon Systems, securing management rights as the largest shareholder. Previously, in 2014, the group acquired 19.49% of Hanon Systems for 1.08 trillion won, and with this additional stake, they will have invested a total of about 2.8 trillion won in the company.
This acquisition of Hanon Systems by the Hankook & Company Group is the result of Chairman Cho Hyun Bum’s extraordinary foresight and meticulous business strategy aiming for a future growth strategy that has been in development for ten years, anticipating the electric vehicle era. Since the initial share acquisition of Hanon Systems (formerly Halla Visteon Climate Control) in 2014, Chairman Cho has been preparing for a leap as a ‘game changer’ in the electrification era by conceptualizing a next-generation business model that combines top-tier tire technology with automotive thermal management system (TMS) technology.
In particular, Chairman Cho has focused on Hanon Systems’ distinct technological capabilities and growth potential over the past decade. Unlike traditional acquisition methods implemented by large enterprises and private equity firms that rely on temporary large-scale capital investments for share acquisition and management rights, he thoroughly verified Hanon Systems’ fundamentals such as technology, management strategies, and corporate culture over a long period to minimize the risks associated with the acquisition. By integrating the group’s growth DNA into this process, a differentiated strategy has been established to enable Hanon Systems to become a key player in the electric vehicle era.
With the acquisition of Hanon Systems, the Hankook & Company Group is expected to gain momentum for dynamic future growth in both quantitative and qualitative aspects. They will become a truly high-tech company with a solid portfolio that includes core components related to electric vehicles such as tires, batteries, and thermal management systems.
Hankook Tire’s world-first full lineup electric vehicle-specific tire brand, ‘iON,’ has established itself as a global leader in the highly specialized electric vehicle tire market since its launch in 2022. Hanon Systems is also significantly expanding partnerships with renowned electric vehicle brands based on its industry-leading thermal management system technology. As a result, the addition of the thermal energy management system solutions sector to the tire division, which has driven the group’s growth, is anticipated to strengthen the business portfolio even further.
The Hankook & Company Group plans to complete all acquisition procedures by the end of this year after undergoing necessary formalities. Upon completion, the group’s total global assets are expected to grow to approximately 26 trillion won, entering the ranks of the top 30 conglomerates in South Korea.
Chairman Cho Hyun Bum stated, “By securing management rights in Hanon Systems, Hankook & Company Group will leap into a hi-tech company in the electric vehicle era by possessing core components such as tires and automotive thermal management technologies. While expanding the group’s size, we aim to grow into a company with 30 trillion won in revenue by 2030 by expanding into next-generation technology-based additional businesses beyond the automotive industry,” he added.
Meanwhile, Hanon Systems is the world’s second-largest company encompassing the entire design of electric vehicle thermal management systems to parts supply. With overwhelming technological competitiveness in fields including thermal management systems that efficiently manage battery performance, which is significantly impacted by outdoor and indoor temperatures, as well as electric compressors and refrigerant/cooling integrated modules, Hanon Systems is leading the rapidly growing electric vehicle thermal management system solutions market.
Hanon Systems’ revenue for 2023 is projected to be 9.5593 trillion won, and the company is continuously engaging in research and development activities based on 53 production sites across 21 countries and 3 innovation centers. Furthermore, it is showcasing significant prominence in electric vehicle core areas, particularly in electric compressors and heat pump sectors. Leveraging its industry-leading technological competency, Hanon Systems continues to expand business partnerships with global automotive brands including Hyundai Motor Group, Ford, Volkswagen, BMW, and Mercedes-Benz.
Inquiries: Sang-Jin Lee daedusj@autodiary.kr