Hyundai Motors will form new chaebol

A new chaebol group with 35.7 trillion won in assets and 16.1 trillion won in sales has been born.

It will be the nation`s fifth largest conglomerate after Samsung, Hyundai, LG and SK. Hyundai Group will rank second among domestic conglomerates after Samsung after Hyundai Motors¡¯ spin-off from Hyundai Group. Hyundai Motor officials were defeated in the fight over the managerial rights to Hyundai Group, but they seem to be satisfied with the spin-off from the group.

The Fair Trading Commission (FTC) formally approved the spin-off plan, which will yield a chaebol of 10 affiliated companies.

Lee Nam-Kee, chairman of the FTC, said at a press conference that the FTC had approved the proposal because it satisfied all the government¡¯s requirements, including settlement in sharing of ownership between Hyundai Motors and Hyundai Group, as well as cross-debt guarantees.

Hyundai Motors Group will have 10 affiliates, including Hyundai Motors, Kia Motors, Hyundai Precision and Industry, Hyundai Pipe, Hyundai Capital, Hyundai Space and Aircraft, Autoever.com, Eh.com, Inchon Steel and Iron, and Samypo Works..

Originally, Hyundai Group planned to separate Inchon Iron & Steel from Hyundai Motors Group, but the FTC found that Hyundai Motors chairman Chung Mong-Koo held substantial control over the steel company and included it in the automotive group.

Most interesting will be to see how the two Hyundai groups interact after the separation of two brothers, Mong-Koo and Mong-Hun. Also, it has yet to be seen whether the struggle between the brothers has been resolved.

The possible changes in Hyundai Group`s internal structure draw attention, as Hyundai Securities chairman Lee Ik-Chi, an aide of Hyundai Group chairman Chung Mong-Hun, resigned.