Hyundai Motor Group to set up U.S. unit to oversee $11 bn capex in the US

[Photo by MK DB]

South Korean auto conglomerate Hyundai Motor Group will establish an investment unit in the United States as a follow-up to its $10.5 billion investment scheme pledged during U.S. President Joe Biden’s visit to Seoul last month to suggest its capex in the U.S. would stay intact regardless of higher exchange rate and interest rates.

Through the establishment the subsidiary tentatively named HMG Global in August, Hyundai Motor Co., Kia Corp. and Hyundai Mobis Co. would discover and explore M&A opportunities in the U.S., according to their separate disclosures on Thursday.

Hyundai Motor and Kia will dole out 747.6 billion won ($577.3 million) in capital, while Hyundai Motor and Hyundai Mobis yield their 50 percent stake in Boston Dynamics worth 746.7 billion won to the new American unit. Hyundai Motor Group acquired 80 percent stake in the robotics company for $1.1 billion in June last year. The equity capital of the new entity would come to $10.9 billion in current exchange rate.

In detail, Hyundai Motor will inject 291.2 billion won in cash and transfer in kind a 30 percent stake worth 448 billion won. Kia will invest 456.4 billion won, and Hyundai Mobis will transfer in kind a 20 percent stake worth 298.7 billion won.

As result, Hyundai Motor will own 49.5 percent in the new company, Kia 30.5 percent, and Hyundai Mobis 20 percent.

Separately, Hyundai Motor announced it will employ AI machine to interview new recruits from July by posting new openings through its website when they are in need.

Hyundai Motor shares were trading 0.28 percent higher at 181,000 won in Seoul trading by midday Friday, Kia 1.29 percent up at 78,300 won, and Hyundai Mobis 1.26 percent up at 201,500 won.

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