Hankook Tire, Korea's No. 1 tire company, will acquire Halla Visteon Climate Control Corp., the world's second-largest automotive climate control system producer, jointly with private equity firm Han & Co. According to investment banking sources on December 15, Han & Co. is at the stage of final negotiation to enlist Hankook Tire as a strategic investor to the Halla Visteon Climate Control deal. The two companies will likely sign a stock purchase agreement with America's Visteon Group next week at the earliest.

Halla Visteon Climate Control was established in March 1986 by the Ford Motor Company and Korea's Mando Machinery, currently Mando Corp. Its controlling stakeholder changed to Visteon in 1999 as Halla Group sold off a 50-percent stake in the company following the 1997 Asian financial crisis. Under the terms of the agreement, Han & Co. and Hankook Tire will take over the 69.99-percent stake in the company under the share of 70:30. But Hankook Tire will likely have the priority right to buy the shares of Han & Co. when the latter sells them. The price tag for the deal is estimated at 3.9 trillion won at the per-share price of 52,000 won. Until very recently, it was known that Han & Co. would be the sole acquirer of Halla Visteon shares. The main reason the private equity firm decided to join hands with Hankook Tire is that the tire company can expect to reap synergies from the union, which would make the deal more palatable.

Source: Korea Economic Daily