HD Hyundai XiteSolution announced Tuesday that its two construction affiliates — HD Hyundai Construction Equipment and HD Hyundai Infracore — decided to merge to form a new company tentatively named HD Construction Equipment, aiming to boost competitiveness amid intensifying industry dynamics.
According to regulatory filings, separate meetings by the board of directors at the two companies approved the merger. HD Hyundai Construction Equipment will remain and is expected to begin as HD Construction Equipment on Jan. 1, following procedural requirements such as a temporary shareholders’ meeting scheduled for Sept. 16 and a merger screening by the authorities.
HD Hyundai XiteSolution said it pushed for the merger to swiftly respond to market demands as competition intensifies within the industry, while the global economic uncertainties continue, and secure future technology and cost competitiveness.
As the combined annual revenue of HD Hyundai Construction Equipment and HD Hyundai Infracore stands at about 8 trillion won ($5.9 billion), HD Hyundai XiteSolution said the new entity aims to log over 14.8 trillion won in annual revenue in 2030.
HD Construction Equipment will be in charge of the two main brands of the existing companies, Hyundai and Develon, seeking a balanced growth across all of its business areas, including construction equipment manufacturing, engines and aftermarket services.
Through a unified decision-making structure, HD Construction Equipment plans to optimize its product lineup and production systems by region while expanding the business area of compact equipment to prepare a full lineup of construction equipment to strengthen its competitiveness.
The new company will also look to secure future growth engines such as automated and smart equipment and total solutions through integrated research and development capabilities.
The shareholders of HD Hyundai Infracore will be able to receive new shares of HD Hyundai Construction Equipment, the surviving company, for the merger. Under the merger ratio, 0.16 share of HD Hyundai Construction Equipment will be assigned for each common share of HD Hyundai Infracore.
“This merger will drive sustainable growth for the construction equipment division of HD Hyundai, helping us strengthen our position in the global market and serving as a significant milestone in advancing Korea’s construction equipment industry,” said Cho Young-cheul, CEO of HD Hyundai XiteSolution.
hwkan@heraldcorp.com
