Approval by the regulator has cleared the way for a purchase of a major stake in Doosan Infracore by Hyundai Construction Equipment’s parent, Hyundai Genuine. The move has been approved by the Fair Trade Commission (FTC) and will see Hyundai Genuine buying a 34.4% stake in Doosan Infracore in a deal worth US$760 million.
The official regulator has stated that this move will not restrict competition in the market. While the two brands have strong positions in the South Korean market combining to have 51.2% of the excavator segment and 66% of the wheeled loader segment, the FTC says that supply currently exceeds demand. The Volvo CE brand also holds a strong share of the South Korean market as the firm makes its excavators in the country, having previously acquired this range from Samsung some years ago. As a result of the market conditions, Doosan and Hyundai will not be able to dictate machine prices to South Korean customers. There is also a high level of competition for the global market provided by other construction machinery manufacturers (from China, Europe, Japan and the US).
Hyundai Genuine was established earlier this year by Hyundai Heavy Industries Holdings with the view to acquiring a major stake in Doosan Infracore. With this development, Hyundai Genuine will now be able to become one of the world’s top five construction equipment manufacturers. At present the two brands combined would rank a joint firm ninth in the global market for construction machines, with Caterpillar in first place and Komatsu in second.