Japan's ORIX Corporation's acquisition of 88.8 percent stake in Hyundai Logistics

  • Recent Matters
  • 2015.06.05
In July 2014, Hyundai Group announced a deal to sell Hyundai Logistics to Orix Corp., a Japanese financial company, in an effort to improve its financial conditions. Hyundai Group and Orix Corp. agreed to establish an Orix-led Special Purpose Company (SPC) that would acquire three subsidiaries' (Hyundai Merchant Marine, Hyundai Global, Hyundai Securities) and group chairwoman Jung-Eun Hyun's stake (88.8%, 16,215,112 shares) in Hyundai Logistics to SPC. Yoon & Yang LLC advised sellers in negotiating the terms of the sale, drafting and executing a share purchase agreement and on relevant legal issues. As a subsequent deal, Yoon & Yang also advised Hyundai U&I, WM Investment and chairwoman Hyun in sales of Hyundai Logistics warrants to the SPC which amounted 1.4 billion shares of Hyundai Logistics. The transaction was closed on September 29, 2014.  
The deal is primarily the sales of Hyundai Logistics to Orix Corp and the main structure is the sales of the shares/warrants of Hyundai Logistics as stated above.
The key issues of this deal were as follows: (1) Orix Corp., a Japanese financial conglomerate, purchased Korean company from Korean conglomerate. (2) Yoon & Yang advised Hyundai Merchant Marine, one of the investors of the SPC that would purchase an 88.8% stake and warrants in Hyundai Logistics from various sellers. (3) Hyundai Group wanted to maintain controlling stakes in Hyundai Elevator, another Hyundai subsidiary, even after the sale of stakes in Hyundai Logistics through which Hyundai Group had maintained its controlling stakes in Hyundai Elevator. It required the sale of stakes in Hyundai Elevator held by Hyundai Logistics to Hyundai Global and chairwoman Hyun. Yoon & Yang also advised both seller and buyers in the acqusition of stakes in Hyundai Elevator from Hyundai Logistics by Hyundai Global and chairwoman Jung-Eun Hyun.  (4) A newly enacted antitrust law prohibiting circular-shareholding investments came into effect on July 25, 2014. As a result, the acquisition of stakes in Hyundai Elevator by Hyundai Global would become unlawful under the law. In compliance with the law, Hyundai Group decided to sell 1,625,728 Hyundai Global shares held by Hyundai Merchant Marine and Hyundai U&I to chairwoman Hyun, and Yoon & Yang advised both buyer and sellers in this sales in complying with the prohibition of making circular-shareholding investments.
#Mergers & Acquisitions