Like any large manufacturer the Hyundai-Kia Auto Group works to insure efficient flow of product from their suppliers. One solution is to acquire key suppliers.
Hyundai-Kia Automotive Group chairman Chung Mong-koo announced that the is interested in taking over Mando, a major Korean automobile parts maker, Financial Times reported.
It is the first time that the carmaker has expressed interest in the deal over Mando. The price tag is thought to be around $2 billion.
Sunsage, a joint investment firm between JP Morgan Partners and Affinity Capital, owns a 73.11 percent stake in Mando, and wants to complete its sale by the end of this year..
Why take over Mando?
With Hyundai, which controls about 70 percent of the Korean market along with its affiliate Kia Motors, in the bidding, the competition is expected to heat up over the parts maker, which is heavily dependent on the automaker for its revenue. Hyundai and Kia account for about 70 percent of Mando's sales.
Hyundai officials said the company'’s acquisition of Mando will be a huge financial burden, but the deal will make it possible for Hyundai to establish a more efficient parts production and distribution system.
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