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Hyundai Heavy completes takeover of Doosan Infracore

All News 15:28 August 20, 2021

By Nam Kwang-sik

SEOUL, Aug. 20 (Yonhap) -- Hyundai Heavy Industries Holdings Co. (HHIH), the world's largest shipbuilding group, said Friday that it has completed the process to acquire South Korea's top construction equipment maker Doosan Infracore Co.

HHIH formed a consortium with KDB Investment Co., a private equity firm wholly owned by the state-run Korea Development Bank, to buy Doosan Infracore from cash-strapped Doosan Heavy Industries & Construction Co. for 850 billion won (US$720 million) late last year.

In July, HHIH established its second subholding company Hyundai Genuine Co. to control its construction machinery maker Hyundai Construction Equipment Co. and Doosan Infracore.

Kwon Oh-gap (4th from L), chairman of Hyundai Heavy Industries Holdings Co. (HHIH), visits a plant of Doosan Infracore Co. along with other company officials on Aug. 20, 2021, in this photo provided by HHIH the same day. (Yonhap)

In South Korea, three construction equipment makers -- Doosan Infracore, Hyundai Construction Equipment and Volvo Construction Equipment -- are vying to expand their presence.

HHIH has another subholding company Korea Shipbuilding & Offshore Engineering Co. (KSOE) to control three shipbuilding companies--Hyundai Heavy Industries Co., Hyundai Mipo Dockyard Co. and Hyundai Samho Heavy Industries Co.

KSOE has been pushing for the takeover of South Korea's second-largest shipbuilder Daewoo Shipbuilding & Marine Engineering Co.

On Wednesday, Doosan Infracore finished legal dispute with its financial investors including Mirae Asset Private Equity, which are related to its Chinese unit Doosan Infracore China Co. (DICC) by buying back 20 percent stake in DICC from them for 305 billion won.

In 2011, Doosan Infracore invited financial investors of DICC to make inroads into the Chinese construction equipment market and repay its debts, promising to help them retrieve their investment by listing the shares of DICC on the Chinese market within three years.

In return for investments worth 380 billion won, Doosan Infracore gave a 20 percent stake in DICC to financial investors, holding on to a 80 percent stake of its Chinese unit.

Doosan Infracore promised that it would list DICC on China's stock market to ensure profits of financial investors, but failed to list it on the stock market.

Financial investors filed a lawsuit against Doosan Infracore to retrieve their investment in November 2015.


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