Hankook in €1.1bn deal to buy majority holding in Hanon Systems

Seoul – Hankook Tire and Technology has entered a deal with Hahn & Co. Auto Holdings to acquire 25% of shares in Hanon Systems, a maker of automotive thermal management components and systems.

Under an MoU signed 3 May, Hankook is to pay KRW1.73 trillion (€1.1 billion) to acquire the share-holding and also purchase 65.12 million 'new shares' in Hanon Systems.

In 2015, automotive parts major Visteon sold its ownership stake in Hanon Systems to a consortium including Hankook and equity firm Hahn & Co. for about $3.6 billion.

As part of that deal, Hankook is understood to have paid around KRW1.08 trillion to gain a 19.5% shareholding in Daejeon-based Hanon Systems.

Once the latest transactions are completed, Hankook will own a 50.5% stake in Hanon Systems to become the majority shareholder in the automotive parts maker.

Hahn & Co. private equity fund will be the second largest shareholder with a 23% stake in the group.

The deal will particularly bolster Hankook’s position in the electric vehicle sector: adding thermal-management technologies to its expertise and capabilities in tire design, manufacturing and supply.

Hanon Systems produces parts for automotive heating, ventilation, air-conditioning, powertrain cooling, compressors, fluid transport, electronics and fluid pressure systems.

Established in 1983, the company is claimed to be the world’s second largest player in the segment, following Japanese-based Denso.

Hanon Systems reported an operating profit of KRW277.3 billion on sales of KRW9.6 trillion last year.

Hankook said it expects to complete the deal by the end of this year.