Hankook & Company Group seeks to secure the management rights of Hanon Systems

Brampton, Ontario, May 3, 2024 – Hankook & Company Group is accelerating its transformation into a global high-tech company with the acquisition of an additional stake in Hanon Systems, the world’s second-largest automotive thermal and energy management solutions company. The acquisition, which will be executed through its core business Hankook Tire & Technology (Hankook Tire), will be completed by the end of the year and is expected to expand the group into one of the top 30 companies in Korea.

On May 3rd, 2024, Hankook Tire, held a board of directors meeting where the company resolved to acquire private equity (PE) firm Hahn & Company’s 25% stake in Hanon Systems, 12.2% of new shares to be issued through a capital increase for a total of KRW 1.733 trillion ($1.26 billion USD) and signed the ‘Hanon Systems Investment memorandum of understanding (MOU).’

Upon completion of the acquisition, Hankook & Company Group will hold a 50.53% stake in Hanon Systems and take management rights as the largest shareholder. The group previously acquired a 19.49% stake in Hanon Systems in 2014 for KRW 1.08 trillion ($790.3 million USD). With this additional stake, the group will invest a total of KRW 2.8 trillion ($2 billion USD) in the acquisition of Hanon Systems.

Hankook & Company Group’s acquisition of Hanon Systems is the culmination of a future growth strategy stemming from Chairman Hyunbum Cho’s anticipation of the electric vehicle era nearly a decade ago. From the time Chairman Cho first acquired a stake in Hanon Systems (formerly Halla Visteon Climate Control) in 2014, he envisioned Hankook’s role as a game-changer in the era of the electrification of mobility, conceptualizing a next-generation business model that combines global top-tier tire and automotive Thermal Management System (TMS) technologies.

With the acquisition of Hanon Systems, Hankook & Company Group will gain the momentum to accelerate its dynamic future growth in both quantitative and qualitative terms. The group will become a leading high-tech company in future mobility by acquiring core components related to electric vehicles, including tires, batteries, and TMS.

Hanon Systems is also significantly expanding its partnerships with key electric vehicle brands based on its industry-leading electric vehicle TMS technology. By working with TMS solutions alongside its tire products, which have been a significant driver of the Group’s growth, Hankook Tire is expected to further strengthen its business portfolio.

Hankook & Company Group plans to finalize the acquisition by year-end, pending the completion of all requisite procedures. Upon finalization, Hankook & Company Group’s total global assets are forecasted to reach around KRW 26 trillion, positioning it among South Korea’s top 30 companies.

“Through the acquisition of Hanon Systems’ management rights, Hankook & Company Group will become a provider of crucial technology for the electric vehicle era, including TMS technology and tires for automobiles,” said Chairman Cho. “Hankook & Company Group is targeting sales of KRW 30 trillion ($19 billion USD) by 2030 by expanding additional businesses based on the next-generation technology beyond the automotive industry.”

Hanon Systems is considered the world’s second-largest company in TMS for electric vehicles, from complete design to C-parts supply. It leads the electric vehicle TMS solution market and is predicted to experience a high level of growth by securing comprehensive technological competitiveness in fields such as electric compressors, refrigerant and coolant integrated modules, and TMS which efficiently manage the battery performance of electric vehicles, the driving distance of which is significantly impacted by indoor and outdoor temperatures.