Hyundai Motor Co., Korea's leading automobile manufacturer, has decided to acquire Mando Corp., one of the largest automobile parts suppliers in the nation.
The auto company said yesterday that it has agreed with Mando's largest shareholder, Hong Kong-based investment company Sunsage, to buy Mando this year.
Sunsage, jointly owned by JP Morgan Partners and Affinity Capital, holds a 73 percent stake in Mando, whose capital totals 35 billion won ($33.7 million).
Hyundai said it has been conducting due diligence since last week. The acquisition price has yet to be negotiated, the automaker said. However, considering that the value of the Mando shares owned by Sunsage is in the range of 250,000 won per share, Hyundai's payment is estimated to be around $700 million.
Hyundai's expansion of its automobile parts supply business has been putting pressure on Mando, particularly since Hyundai Mobis, a major affiliate of Hyundai Motor, took over another parts supplier, Kasco, in an effort to expand its automobile brake development unit.