HD Hyundai Construction Equipment and HD Hyundai Infracore will merge to create HD Construction Equipment, a new company launching with consolidated sales of about USD 6.15 billion. Boards of both firms approved the tie up on 1 July; an extraordinary shareholders’ meeting is set for 16 September, subject to regulatory clearance.

The merger is designed to sharpen the group’s response to volatile markets, bolster technological capability and keep costs competitive. The combined business will trade under two brands, Hyundai and Develon, focusing on construction equipment while growing its engine and aftermarket divisions.

By 2030 the company targets annual revenue of USD 11 billion. Scale benefits will be sought by optimising product lines and assigning regional production specialties. Expansion of the compact machinery range aims to deliver a complete line up from mini to ultra large kit, reinforcing core competitiveness.

To widen income streams, HD Construction Equipment will nurture its engine operation and enlarge aftermarket services such as parts replacement and maintenance. Integrated R&D will drive future growth through electrified and smart machines and end to end equipment solutions.

Under the share swap terms, each common share in HD Hyundai Infracore will be exchanged for 0.1621707 common shares in the new company.

“This merger will power sustainable growth for HD Hyundai’s construction equipment division, strengthening our global position and marking a milestone for Korea’s industry,” said Cho Young cheul, president and chief executive of HD Hyundai XiteSolution.