Hyundai-led group agrees to $10 billion land deal, stokes union rage
By Hyunjoo Jin
SEOUL (Reuters) - Hyundai Motor Co (005380.KS: Quote) and its two affiliates approved Asia's biggest property deal since the financial crisis on Friday when their board members agreed to pay 10.55 trillion won ($10.12 billion) for a trophy plot of land to house a new headquarters in downtown Seoul.
The Hyundai-led group - which includes Kia Motors Corp (000270.KS: Quote) and Hyundai Mobis Co 012330.KS - agreed to the price, more than triple the appraised amount, prompting a sharp sell-off in the companies' shares.
About 11.6 trillion Korean won ($11.11 billion) have been wiped of the market values of the companies since the purchase was announced last week.
Labor union employees, who make up the bulk of the companies' workforce, voted on Friday to extend a strike into next week in show of disapproval of the purchase which will be used to house a new headquarters, hotel and theme park complex.
"Building an integrated control tower will enhance work efficiency and brand value," Hyundai Motor said in its regulatory filing on Friday.
The Hyundai-led consortium, which beat Samsung Electronics (005930.KS: Quote) to buy the plot in the capital's high-end Gangnam district, plans to ink the deal with the state-run Korea Electric Power Corp (KEPCO) 015760.KS later on Friday.
Shares of Hyundai Motor ended down 1.3 percent at 187,000 won each on Friday, their lowest level in 17 months. Kia Motors slipped 0.8 percent, and Hyundai Mobis was up 0.6 percent.
The $10 billion price-tag is equivalent to selling nearly half a million of Hyundai's flagship Sonata sedans, and nearly two years of combined wages for Hyundai's 63,099 employees in Korea, according to Reuters' calculation. Continued...