Swiss Buy Hyundai Management Stake

Overseas capital is continuing its assault on Korean companies.

Schindler Holding AG, the world’s second largest elevator company based in Switzerland, bought a significant number of Hyundai Elevator shares on March 27 and reported to Korea’s Financial Supervisory Service its intention to “participate in management,” including the appointment of executives and auditors, and making changes to the company’s organizations and articles of association and allotment.

The Swiss company spent about 149.3 billion won on approximately 1.82 million shares (25.54 percent) of Hyundai Elevator, owned by KCC, KCC Engineering and Construction and KCC Honorary Chairman Chung Sang-young.

Because Hyundai Elevator is the holding company of the Hyundai Group led by Chairman Hyun Jung-eun, the group is paying keen attention to the intentions of Schindler Holding AG.

A Schindler Holding AG spokesperson said, “We acquired the Hyundai Elevator stake as part of a long-term investment in the Korean elevator market, the fourth-largest in the world. We are a friendly shareholder of Hyundai.”

But considering that the company established the Schindler Joongang Elevator Company in January 2003 by acquiring Joongang Elevator, the fourth-largest domestic elevator company at the time, the hostile merger intentions are a possibility.

Hyundai Group management owns a 29.9 percent stake in Hyundai Elevator: Chairman Hyun Jung-eun holds 3.9 percent, Hyun’s mother holds 19.4 percent, Hyundai Securities holds 5.0 percent, and others hold 1.6 percent. The total is less than five percentage points more than the stake Schindler Holding AG currently owns (25.54 percent).

Meanwhile, SK Corp., which underwent an assault on its management rights from Sovereign Asset Management, is paying particular attention to Templeton Asset Management, the second largest shareholder of SK Corp., which is increasing its stake in SK Corp.

By purchasing an additional 1.03 percent stake in SK Corp. recently, Templeton increased its stake in SK to 6.06 percent from 5.03 percent.

Experts say that there is a slim chance that Templeton could become a “second Sovereign,” because SK affiliates and management own a 12.94 percent stake (with SK holding 11.16 percent, Chairman Chey Tae-won holding 0.91 percent, and SK Chemical holding 0.83 percent) in SK Corp., double the amount of shares owned by Templeton, and because Templeton has not intervened in the company’s management rights so far.

Sang-Soo Kim ssoo@donga.com