South Korea’s largest tiremaker, Hankook Tire Co. and its investment partner Hahn & Co agreed to pay around $3.6 billion for the purchase of the majority stake in Visteon Corp’s South Korean division.
The tiremaker is thus expanding its business ventures into car temperature-control systems, with Hankook ready to invest 1.082 trillion won ($982 million) to purchase 19.49 % – Hahn providing the necessary funds for the rest of Visteon’s 70% holding in Halla, announced Visteon and Seoul-based Hankook in separate statements. According to a filling from the latter, the move would diversify the company’s business, allow it to become more competitive and Hankook also has the exclusive right of first refusal should Hahn decide to divest its purchased stake.
Visteon’s statement also reveals that the transaction is actually around 10.1 times Halla Climate’s earnings before interest, taxes, depreciation and amortization for the 12 months ended Sept. 30. The purchase remain subject to regulatory and shareholder approvals and if all goes well it should be finalized during the first part of next year. Van Buren, Michigan-based Visteon exited bankruptcy reorganization back in 2010 and later divested its car air-control unit to Halla Climate back in 2013, with the supplier now focusing on connected cars as in-vehicle technology has become a major selling point for many drivers.