SMEC wants Hyundai Wia's machine tool division

SMEC has formed a consortium with Rylson Private Equity, a private equity fund operator (PE), to negotiate the acquisition of Hyundai Wia's Machine Tool Division.

The key synergy of the acquisition will be generated in that SMEC and Hyundai Wia's Machine Tool Division have different frontline industries in which they have strength despite their competitive relations. When SMEC, which has strengths in the IT industry, combines with Hyundai Wia's Machine Tool Division, which focuses on the automotive industry, a machine tool company encompassing both major sectors of the machine tool market will be created.

In addition, SMEC, which has strong points in the multi-product small-quantity production system centred on semiconductors and IT, will bring about new synergies by acquiring Hyundai Wia's Machine Tool Division, which has secured global finished car manufacturers as its main clients.

Synergies in the global market are also anticipated. The global network of the two companies is expected to more than double in the current 29 countries, and the expansion of the product portfolio is likely to increase market share by country. In addition, significantly enhanced purchasing power in terms of parts and raw material procurement is likely to lead cost reduction. 

"We will successfully complete the acquisition and establish a two-major pillar structure in the domestic machine tool market," adding, "A seismic shift is expected in the domestic machine tool market and industrial robot market. It will also leap forward as a global machine tool company through its external growth and synergies from the acquisition," SMEC states in a press release.

Meanwhile, SMEC has been actively targeting the high-end markets in the United States and Europe, achieving high growth in terms of sales and profits, while Hyundai Wia's Machine Tool Division is recording earnings growth following the growth in the electric vehicle market.