The Acquisition of Kia Motors by Hyundai Motors

In: Business and Management

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Every company has a purpose, and part of that purpose is to create wealth and value. However, there are other responsibilities that have been entrusted with companies. The environmental and social responsibilities of a company have an important role in its ability to maintain a social license to operate, ensure a consistent pool of resources that are required for the business to perform its functions, and to generate profits.

The Acquisition of Kia Motors by Hyundai Motors
Fikre Y. Wondimu

Author Note
Fikre Y. Wondimu is a student at California Intercontinental University.
Special thanks to Dr. Troy Roland and Dr. Fathiah Inserto for providing suggestions to improve this document format and content.
Correspondence concerning this thesis should be addressed to Fikre Y. Wondimu, CalUniversity, 1470 Valley Vista Drive #150, Diamond Bar, CA 91765.
The last decade demonstrated decreased revenue and higher value of development costs, which led the automobile industry to engage in domestic and international mergers and acquisition (M&A). This case analyis examines one of the largest M&As in the Korean automobile industry in recent years, the acquisition of Kia Motors (Kia) by Hyundai Motors (Hyundai). The case study briefly analyses the conditions of the acquisition, the integration and stabilization processes undertaken by both companies. By acquiring Kia, Hyundai enhanced its competitive position in both domestic and global markets, achieving economies of scale, scope and strengthened its local and global market. The M&A process of Hyundai/Kia did not come easy. The Post-acquisition and restructuring process faced several challenges of synergy effects prompting for strategy change in order to align with market trends in the domestic and global automobile market space. Furthermore, the…...

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