SEOUL, KOREA - Hyundai Wia announced on August 19 that it would acquire Hyundai Wisco and Hyundai Metia. Given Hyundai Wisco is the only Hyundai Group company in which Chung Eui-sun, vice chairman of Hyundai Motor and the only son of Hyundai Motor Group chairman Chung Mong-koo, holds a stake, the latest announcement is widely interpreted as a move by the group to reform the group's governance structure in favor of the future chairman. 

 

In addition to the Hyundai Wisco-Hyundai Metia merger, the group implemented two more mergers including one between Hyundai AutoEver and Hyundai C&I and one between Hyundai Engineering & Construction will absorb Hyundai E&C Talent Training Center. Once the mergers are completed, Chung Jr. will end up owning 2 percent of Hyundai Wia shares, whose value is estimated at 116 billion won at the current market price. The merger process will be finalized by early November.

 

The 2-percent ownership seems insignificant, but analysts said it may be critical to the group's government structure change. An IM Investment & Securities analyst said, "After the merger, the vice chairman's stake in Hyundai Wia will be 1.95 percent. Although this is not a lot currently, it may become more important as Hyundai Wia leads the engine segment in the group-wide effort to expand overseas plants." 

 

A KDB Daewoo Securities analyst concurred, "Hyundai Wia became one of the Hyundai companies, together with Hyundai Motor, Kia Motors, Hyundai Steel, and Hyundai Glovis, in which individuals from the founding family hold a stake. No matter how small the individual shareholding may be, it is much better for the stock price than other shares that don't have such aura."