HD Hyundai has embarked on a search to acquire companies valued in the trillions of won, leveraging its strong cash reserves from robust performances across its major subsidiaries.
Industry insiders suggest that the conglomerate is considering acquiring undervalued companies, viewing the current market conditions as favorable. There are also reports that HD Hyundai has been in behind-the-scenes discussions with the Korea Development Bank (KDB) regarding a potential acquisition of HMM, following a previously unsuccessful sale last year.
According to the investment banking sector, HD Hyundai is actively conducting market research to identify potential acquisition targets worth billions of dollars. While some speculate that the company might reacquire Hyundai Hyms, which it had previously sold to private equity firm J&PE, sources indicate that HD Hyundai is also keen on larger-scale acquisitions.
Industry sources have revealed that HMM is among the assets HD Hyundai is interested in. Reports suggest that the company has engaged in preliminary discussions with KDB, which holds management rights over HMM. However, HD Hyundai has officially denied these claims.
An industry insider noted, “HMM’s high valuation makes it difficult to find potential buyers, but interest in its sale has picked up recently.” If the remaining perpetual bonds are converted into shares this April, KDB and the Korea Ocean Business Corporation will hold nearly 72% of HMM, which could push its sale price to around 10 trillion won (approximately $6.9 billion).
Market analysts believe that HD Hyundai is well-positioned to pursue acquisitions of this magnitude. A senior official in the investment banking sector commented, “The defense and shipbuilding sectors are performing exceptionally well, and HD Hyundai Electric is generating significant profits.”
In 2024, HD Hyundai Electric reported sales of $2.3 billion and an operating profit of approximately $463.5 million, marking a 20% increase in operating profit from the previous year.
The global surge in artificial intelligence (AI) has driven substantial investments in power infrastructure for data centers, boosting sales of electrical equipment. HD Hyundai holds a 37% stake in this subsidiary, which had current assets totaling about $1.6 billion as of the end of the third quarter last year.
The group’s shipbuilding and marine subsidiaries have also been significant contributors to its cash reserves. Last year, HD Korea Shipbuilding & Offshore Engineering achieved sales of approximately $17.6 billion and an operating profit of about $990.9 million, representing a 408% increase in operating profit from the previous year.
The strong performance of its subsidiaries has been the main driver of HD Korea Shipbuilding & Offshore Engineering’s growth, significantly contributing to its overall improvement.
HD Hyundai Heavy Industries reported sales of about $10 billion and an operating profit of approximately $489.6 million. HD Hyundai Samho reported sales of $4.8 billion and an operating profit of $502.3 million, while HD Hyundai Mipo reported sales of $3.2 billion and an operating profit of $61.4 million.
HD Hyundai Marine Solutions, which was listed on the KOSPI market last year, also contributed to the group’s strong performance with sales of $1.2 billion and an operating profit of $188.6 million.
Additionally, the group’s robotics subsidiary, HD Hyundai Robotics, is in talks with financial investors to secure pre-IPO investments, aiming for a corporate valuation of approximately $4.8 to $5.5 billion. The investment amount is reported to be in the range of $69.3 million. HD Hyundai holds a 90% stake in HD Hyundai Robotics.
