The history behind Hyundai and Mirae’s Asiana Airlines grab from Kumho
The sale of Asiana Airlines is an emotional one for the Kumho conglomerate and its home city of Gwangju, but ties with the South Korean southern city will continue.
Tuesday’s announcement that Hyundai Development Company is the preferred bidder for a controlling stake in South Korea’s Asiana Airlines brings one of the country’s most talked-about recent acquisitions closer to completion.
Hyundai leads a consortium, alongside brokerage Mirae Asset Daewoo, which offered KRW2.5 trillion ($2.15 billion) for a combination of the 31.05% stake held by top shareholder Kumho Industrial, plus new shares to be issued by Asiana.
They beat a rival bid from a group led by Aekyung, which owns budget airline Jeju Air, which is reported to have bid KRW2 trillion, though Euromoney has not been able to confirm this.
The sale of Asiana has attracted widespread attention in Seoul, perhaps because airlines carry a curious sense of national identity and because pretty much every consumer is familiar with them.
However, there’s more to it than that: it’s a deal rich with sub-plots.
The sale has been forced upon the Kumho group, historically one of South Korea’s leading chaebols with interests across automotive, logistics, industrial and chemical sectors, among others.
After the Asian financial crisis, Kumho was one of the strongest conglomerates in the country, but it used its financial strength of the time unwisely, buying Daewoo Engineering & Construction, which was laden with debt.