Hyundai Motor and its two largest affiliates – Kia Motors and Hyundai Mobis – have decided to make the largest post-crisis property deal in Asia – a move that brought criticism from both investors and workers.
The 10.55 trillion won ($10.12 billion) deal has seen the trophy land sold at more than three times the appraised amount, with the supervisory boards approving the deal late last week.
“Building an integrated control tower will enhance work efficiency and brand value,” Hyundai Motor said in a regulatory filing on Friday.
The move to purchase the plot from state-run Korea Electric Power Corp has also wiped around 11.6 trillion Korean won ($11.11 billion) from the market value of the trio of companies, as Hyundai’s shares dropped to 87,000 won each – their lowest in 17 months.
Besides that, the deal – worth around half a million of Hyundai’s flagship Sonata sedans or two years of combined wages for Hyundai’s 63,099 South Korean employees – has added strain to the annual wage negotiations.
Unions of Hyundai and Kia entered a partial strike last week after finding about the purchase, and Hyundai’s labor organization announced it would continue the walk out through Thursday. The company now plans to expand production facilities to China and Mexico, closer to overseas export regions and in countries with lower wages.