Hankook raising investment in Hanon Systems

Seoul, Korea – Hankook Tire and Technology is increasing its shareholding in Korean automotive thermal management specialist Hanon Systems, from 50.5% to 54.77%.

Under the agreement, Hanon Systems will issue 145 million shares at KRW 4,139 (€2.81) per share, raising KRW 600 billion, to be entirely funded by Hankook Tire & Technology.

This deal revises an earlier agreement from May, where Hankook committed KRW 1.73 trillion (€1.1 billion) to raise its stake in Hanon Systems to 50.5%. (ERJ report)

The capital increase aims to "proactively secure operational funds" for improving cost structures and maintaining competitiveness in the evolving automotive sector, Hanon Systems said on 30 Sept.

Hanon noted that the global automotive parts industry has faced challenges since the Covid pandemic, including supply chain disruptions, inflation, and geopolitical conflicts.

As global car makers revise their electrification strategies, parts suppliers are also adapting their investment and production plans, said the components manufacturer.

Despite these hurdles, Hanon said it had seen growth through "significant new business awards" in eco-friendly vehicle platforms of major automakers.

The company now plans to complete restructuring efforts to adapt to the changing industry landscape.

"As major auto makers adjust their electrification strategies, building a flexible business structure is crucial," said Nurdal Kucukkaya and Subu Nagasubramony, co-CEOs of Hanon Systems.

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

Established in 1983, it is claimed to be the world’s second largest player in the segment, after Japan’s Denso.

Last year, Hanon Systems reported an operating profit of KRW 277.3 billion on sales of KRW 9.6 trillion. Hankook expects to complete the deal by the end of this year.