Hyundai Glovis, the logistics and transportation subsidiary of Hyundai Motor Group, announced on August 13 that it will invest 150 billion won (about $110 million) to acquire a 34.9% stake in the Socius No. 5 Corporate Financial Stability Private Equity Fund, the strategic investor of the Air Incheon Consortium, which is acquiring Asiana Airlines’ cargo division. The move is an important step in Hyundai Glovis’ ongoing efforts to expand its logistics capabilities into the air transportation sector.
In early June, Hyundai Glovis CEO Lee Kyu-bok stated at the “CEO Investor Day 2024” held in Yeouido, Seoul, “We will actively explore mergers and acquisitions (M&A) if necessary for future growth.” This statement paved the way for the company’s latest investment, which is in line with its broader strategy to develop into a comprehensive logistics company.
Hyundai Glovis, known as the world’s third-largest car transporter, has traditionally focused on sea and land transportation. However, the company has openly expressed its intention to expand its transportation infrastructure to include air cargo. Acquiring a stake in Socius No. 5 is seen as a strategic move to achieve this goal.
The Air Incheon Consortium, which includes Socius Private Equity, Inhwa Precision, Korea Investment Partners PE Division, Korea Investment & Securities and Shinhan Investment Corp., will acquire Asiana Airlines’ cargo division. Socius No. 5 holds an 80.3% stake in Air Incheon, making it a key player in the acquisition. Hyundai Glovis’ investment in Socius No. 5 will make it a key shareholder in the future of Asiana’s cargo operations.
News of Hyundai Glovis’ involvement in the acquisition has been rife since the early stages of the sale. However, Hyundai Glovis was unable to take a leading role in the acquisition due to the lack of an Air Operator Certificate (AOC). Therefore, the company waited for the preferred bidder to be selected and confirmed its investment once the acquisition by Air Incheon was completed.
There are predictions that Hyundai Glovis’ involvement in the acquisition of Asiana Airlines’ cargo division could ultimately lead to the acquisition of Air Incheon. Socius plans to merge Air Incheon and Asiana Airlines’ cargo division in July next year and conduct an initial public offering (IPO). From the perspective of Socius, a private equity fund (PEF), this process would involve an exit strategy, and Hyundai Glovis could become the acquiring company.
In fact, Hyundai Glovis plans to increase its logistics competitiveness by expanding into the air logistics sector. The company will complete a Global Distribution Center (GDC) with state-of-the-art automation facilities at Incheon International Airport’s second airport logistics complex by next year. This development underscores Hyundai Glovis’ commitment to leveraging technological advances to improve logistics efficiency.
Hyundai Glovis’ strategic entry into air logistics is part of a broader trend in the logistics industry where companies are increasingly seeking to offer comprehensive solutions that include land, sea and air transportation. This investment not only strengthens Hyundai Glovis’ market position but also aligns with its long-term vision of becoming a more integrated logistics provider.
Source: Business Korea
