Hyundai to bid for stake in E&C company
By Chris Sleight27 September 2010
Hyundai Group has announced its intention to bid for a 35% stake in Hyundai Engineering & Construction (E&C), the country's largest contractor. The announcement may spark a bidding war for Hyundai E&C, with a different faction of the Hyundai business empire, Hyundai-Kia Automotive Group reportedly also planning a bid.
One of Hyundai E&C's long-term creditors, Korea Exchange Bank, has set a deadline of 1 October to receive letters of intent to acquire its 35% stake in the contractor. Hyundai Group has long stated its wish to re-acquire Hyundai E&C, which was spun-off from the group in 2001 following the death of its founder, Chung Ju-young. Hyundai E&C was the first group company Mr Chung set up in 1947.
Both Hyundai Group and Hyundai Kia Automotive have said they will lodge letters of intent to acquire Hyundai E&C by the October 1st deadline. The preferred bidder for the business is expected to be announced by the end of the year, and KEB's 35% stake could be valued at as much as US$ 3.5 billion.
Hyundai E&C had revenues of US$ 8.1 billion last year, making it Koreas' largest contractor and ranking it 39th in the iC league table of the world's largest construction companies.