By Heekyong Yang and Heejin Kim
SEOUL, July 16 (Reuters) – Hyundai Motor Group on Thursday disclosed that it would make U.S. robotics company Boston Dynamics a wholly owned subsidiary by acquiring SoftBank Group’s stake of around 10%, a move it said would help it deploy advanced robotics across its operations.
Terms of the deal were not disclosed.
Local media reported last month that the transaction would likely be worth about 500 billion won ($335 million).
The deal is expected to give Hyundai Motor Group greater strategic flexibility to manage Boston Dynamics, allowing the automaker to make long-term decisions on investments, business strategy and a potential initial public offering.
ROBOTICS PUSH MEETS LABOUR TENSIONS
Hyundai plans to begin deploying Atlas, Boston Dynamics’ humanoid robot, at a manufacturing plant in Georgia from 2028.
The robot will initially handle parts-sequencing tasks, with its role likely to be expanded to a broader range of manufacturing processes, including component assembly by 2030.
The acquisition also comes as Hyundai Motor’s South Korean labour union has intensified industrial action over annual wage negotiations, after staging two-hour partial strikes from Monday through Wednesday and unveiling plans for four-hour strikes from July 20 to July 22, according to Yonhap News Agency.
The union has demanded that the company set aside 30% of its net income for bonuses and to guarantee job security, raising concerns over the growing adoption of robotics and artificial intelligence on assembly lines.
The world’s third-largest carmaker – together with affiliate Kia Corp, which is also developing humanoid robots – appears to be planning to replace human workers with new technologies, a union leader said.
Around 2,000 of Hyundai’s 24,676 unionised workers are expected to retire every year on average by 2032, according to the union. If the company does not hire new workers, the union membership would fall by nearly 10,000, or about 40% of the current workforce by 2032, the union said.
Hyundai acquired an 80% stake in Boston Dynamics in 2021.
MARKET FOCUSES ON VALUATION
Thursday’s announcement appeared to have little immediate impact on Hyundai Motor shares, with investors instead focusing on what the transaction implied about Boston Dynamics’ valuation.
Analysts said investors had expected the purchase of SoftBank’s remaining stake to provide greater clarity on Boston Dynamics’ valuation and potentially act as a catalyst for the automaker’s shares.
Shin Yoonchul, an analyst at Kiwoom Securities, said the transaction price implied a valuation of about 5 trillion won for Boston Dynamics. The financial terms of the deal were not disclosed.
Shin said the muted market reaction suggested investors were questioning whether the valuation previously assigned to the robotics company was justified, rather than viewing the deal as Hyundai Motor Group buying SoftBank’s stake at a discount.
He said Hyundai’s shares might have responded more positively had the company exercised its call option, which becomes exercisable on July 21, at a higher strike price, as that would have implied a higher valuation for Boston Dynamics. Instead, the deal removed what investors had viewed as a near-term catalyst for a re-rating of the robotics company’s valuation.
Hyundai Motor shares have fallen more than 30% since local media first reported last month that the automaker planned to buy SoftBank’s remaining stake in Boston Dynamics. On Thursday, Hyundai Motor shares closed down 2.1%, compared with a 6.4% decline for the benchmark KOSPI.
($1 = 1,484.8000 won)
(Reporting by Heekyong Yang and Heejin Kim; Editing by Edwina Gibbs and Thomas Derpinghaus)