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/Hyundai Rotem

Hyundai Rotem is acquiring Hyundai Wia's defense business for 358.4 billion won. Following its production of finished weapon systems such as K2 tanks, the company has secured manufacturing capabilities for core components like main guns, signaling that the vertical integration of Hyundai Motor Group's land defense business will begin in earnest.

Hyundai Rotem announced in a public filing on the 19th that it held a board meeting and decided to acquire Hyundai Wia's Special Business Division for 358.386 billion won. The transaction covers all assets and liabilities related to the defense business.

Hyundai Wia's Special Business Division produces main guns for K2 tanks and gun barrels for K9 self-propelled howitzers. Last year, its revenue reached 393.1 billion won, accounting for 4.6% of Hyundai Wia's total revenue.

With this acquisition, Hyundai Rotem adds main gun manufacturing technology to its existing capabilities in producing finished K2 tanks. By directly managing the production and supply of core components, the company is expected to sharpen its cost and delivery competitiveness in the defense sector.

The deal materializes the restructuring of Hyundai Motor Group's defense business, which has been underway since April, with the enterprise value of Hyundai Wia's Special Business Division assessed at 480 billion won.

Hyundai Wia plans to approve the business transfer resolution at an extraordinary shareholders' meeting on the 27th of next month. Once the transaction is finalized, Hyundai Wia plans to invest the secured funds into new ventures such as future mobility, while Hyundai Rotem focuses on the vertical integration and diversification of its land defense business.

                                                                                                           Nam Hyun-soo