Tuesday, May 02, 2006

Hyundai Group Under Attack

During the 1960s, 70s, 80s, 90s and into the new millennium, the Hyundai Group was Korea's dominant family owned conglomerate. With the death of its founder Chung Ju Yung in 2001, the Group split between the founder's sons.
Part of the original group were spun-off--some sold, others merged, and some consolidated.

With the death of son Chung Mong Hun, several years ago, a power struggle for control of the Hyundai Group began to surface. This struggle has taken recently escalated...

For example...
Hyundai Group has openly demanded that Hyundai Heavy Industries sell its shares in Hyundai Merchant Marine Co., describing the shipbuilding giant's purchase of a controlling stake in the shipper last week as a clear hostile takeover attempt.

We feel terrible that a hostile takeover attempt has been made while a consanguinity, Hyundai Automotive Group is in trouble,said Jeon In-baek, head of Hyundai Group's corporate planning division, in a news conference yesterday. Hyundai Heavy must sell a 10 percent stake to Hyundai Group since it claims to be a friendly shareholder.

Hyundai Heavy Industries Group, made up of three shipbuilders that spun out of Hyundai Group in 2002, purchased a combined 26.7 percent stake in Hyundai Merchant Marine Co. last week, emerging as the shipper's major shareholder.

Since friendly shareholders account for 35 percent, including 17.2 percent owned by Hyundai Elevator Co., we can defend our management control without restraint if we buy another 16 percent stake," Jeon said. Hyundai Group demanded that the shipbuilder should not buy additional shares and officially announced that it would block the hostile takeover attempt immediately.

Chung Mong-joon, a son of Hyundai Group founder Chung Ju-young, is the largest shareholder of Hyundai Heavy.

Hyundai Group, headed by Hyun Chung-eun, wife of Mong-joon's deceased elder brother, is on the alert as the current situation resembles a tug-of-war that took place two years ago with another family owned company, Kumgang Korea Chemical Co.

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