Hyundai Rotem acquires Hyundai WIA’s defense division for 358.4 billion won — Korea Herald
Hyundai Rotem has acquired Hyundai WIA’s defense division for 358.4 billion won, or $269.9 million. The deal consolidates within Hyundai Rotem the production of the K2 Black Panther main battle tank and its 120 mm main gun, Korea Herald reports.
Gun production
Previously, Hyundai Rotem manufactured the K2 tank, while Hyundai WIA supplied its 120 mm main gun. The acquisition gives Hyundai Rotem greater control over the development and production of the K2, from the tank platform to its firepower systems.
A Hyundai Rotem representative said the main benefit would be closer technical cooperation on the gun barrel, a key component of the tank’s firepower. Firepower is one of a tank’s three main characteristics, alongside mobility and protection.
The company expects that combining development and production will help reduce coordination barriers, as well as research, development and manufacturing costs. Hyundai Rotem said the deal should strengthen its price competitiveness and increase the share of localized components in export orders.
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Localization for exports
The company plans to determine the details of production localization for export contracts after the acquisition. A Hyundai Rotem representative added that no decisions on building overseas plants have been made so far.
Buyers in Poland, Romania and Middle Eastern countries are increasingly demanding local production, technology transfer, and maintenance, repair and overhaul capabilities. Hyundai Rotem already has a partnership with the Polish state-owned defense company Bumar-Labedy for the joint production of adapted K2PL tanks and armored recovery vehicles. The agreement provides for the use of Polish components and the involvement of local engineers in servicing.
BNK Securities analyst Lee Sang-hyeon forecasts that, excluding 30–35% of Hyundai WIA’s defense sales that already went to Hyundai Rotem, the company’s net revenue could increase by about 300 billion won and operating profit by about 50 billion won.
