SOURCE: Hyundai | October 2, 2020
The acquisition could see the merger of Hyundai Construction Equipment and Doosan Infracore into a global construction equipment powerhouse.
In early September, Doosan Infracore Co., South Korea’s largest construction equipment maker, announced the opening of preliminary bidding for a controlling stake in its operations. Hyundai Heavy Industries Group has emerged as a top-tier bidder.
The sale of Doosan Infracore is part of the restructuring process for the beleaguered Doosan Heavy Industries & Construction, which is facing a 4.2 trillion won debt load scheduled to come due later this year. The power plant builder took a major hit when the South Korean government chose to depart from nuclear and coal power.
Doosan Heavy will sell a 36.27% stake in Doosan Infracore and its management. The company’s majority stake in U.S.-based Doosan Bobcat is not included as part of the sale.
Hyundai Heavy Industries Holdings – parent company of Hyundai Construction Equipment Co. – is the sale’s strongest contender. Its entry into the bidding process came on September 28 after Doosan Group indicated it would repay any overseas debts owned by Doosan Infracore.
The combination of Hyundai Construction Equipment and Doosan Infracore has the potential to create a new construction equipment powerhouse. The two entities currently stand at No. 20 and No. 9 in the global construction equipment market, according to a Pulse News report.
In addition, the acquisition would further expand Hyundai Construction’s global presence, particularly in China where Doosan Infracore currently dominates among foreign suppliers.
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