Hyundai Mobis has abandoned a plan to merge with fellow Hyundai subsidiary Hyundai Autonet due to costs imposed by shareholders opposed to their integration.
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Hyundai Mobis and smaller parts maker Hyundai Autonet, units of Hyundai Automotive Group, won support from a special shareholder meeting last month for their integration, which was expected to create synergies worth 600 billion won by 2015.
But both companies have said that they had been asked to buy back shares worth a combined 2.9 trillion won from shareholders disagreeing with the merger plan, far surpassing their limit of 300 billion won.
“This decision (to abort the merger) is an inevitable step to prevent a liquidity deterioration by accepting the buyback request in the uncertain economic conditions of late,” Hyundai Mobis told the Korea Exchange in a disclosure.
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