Hyundai Motor says group chief to buy 20% of Boston Dynamics

Hyundai Motor Group Chairman Chung Euisun has agreed to take a 20% stake in Boston Dynamics Inc. as part of the South Korean group’s acquisition of 80% of the US robotics company from SoftBank Group, the automaker said on Dec. 11.

Hyundai has signed a definitive agreement on the stake purchase, worth $880 million, based on Hyundai’s valuation of the R&D company at $1.1 billion as a whole.

“Chairman Chung’s participation in the acquisition is with a view to strengthening his commitment to responsible management and demonstrating his dedication to continuous investment in new future businesses, which the group will speed up,” the group said in a statement.

Chung’s personal investment, estimated at $220 million, is also expected to help the Korean carmaker attract global talent and secure high-profile business partners in the robotics industry, it added.

The purchase of a majority stake in the technologically advanced but unprofitable company is aimed at bolstering Hyundai’s competitiveness in future businesses, enhancing its corporate value and securing new growth engines.

“By combining Boston Dynamics’ robotics technology with the capabilities of Hyundai Motor Group, which is accelerating its transformation into a smart mobility solutions provider, Hyundai can lead future mobility innovations,” Chung said in the statement.

“We will also play a public humanitarian role in sectors such as public security and healthcare services to address global megatrends such as the aging population and non-contact (services),” he added.

The all-cash deal involves the existing shares in Boston Dynamics owned by both SoftBank and two individual shareholders, as well as new shares to be issued by the US company, according to the three Hyundai units' regulatory filings.

Hyundai is aiming to finalize the purchase of the manufacturer of the maneuverable dog-like robot Spot by as early as the first half of next year, upon regulatory approval from South Korea and the US.

ENTRY IN LOGISTICS ROBOT MARKET

Boston Dynamics is known for the four-legged robot Spot that can trot, climb stairs and open doors. It has also introduced the humanoid robot Atlas and the bird-like mobile robot Handle designed for logistics services.

Hyundai said it focused on the broad applicability of Boston Dynamics’ robotics technology and its growth potential.

“We pushed for the Boston Dynamics acquisition on the conclusion that we can build brand recognition in the robotics market in the early stages more efficiently through this purchase, rather than partnering with multiple companies in various sectors or acquiring several companies,” Hyundai said.

The deal also will give a boost to Hyundai’s new core businesses – autonomous vehicles, urban air mobility and smart factory technology – while helping the US R&D company commercialize its products and improve its bottom line.

Groupwide, Hyundai expects to create a new robot-centered value chain, alongside auto parts maker Hyundai Mobis and Hyundai Glovis Co., a freight transport company.

“With the acquisition of Boston Dynamics, Hyundai Motor Group will first enter the logistics robots market, which has substantial size and high growth potential. Then we will focus on robots that perform services, such as supervising a construction site or doing a public facility safety check."

Robots will be in growing demand across various industries and public service sectors given increasingly aging societies and the social distancing trends started in the pandemic era.

Hyundai estimates the global robotics market to expand by 22% to $44.4 billion by year’s end from $24.5 billion in 2017. The prolonged global pandemic will accelerate the market’s growth at a compound annual growth rate (CAGR) of 32% to $177.2 billion by 2025.

Hyundai said it is not alone in its push into the robotics market. Global carmakers, auto parts makers and logistics companies, including Toyota, Ford and Bosch, have been jumping into the robotics technology market through acquisitions or joint research.

With the remaining 20% stake, SoftBank CEO Masayoshi Son said his company will continue to invest in Boston Dynamics.

The US robot maker was originally spun off from the Massachusetts Institute of Technology in 1992, acquired by Google owner Alphabet in 2014 and then sold to SoftBank in 2017.

On Thursday, Hyundai unveiled a plan to mass produce an automated valet parking car by 2024. That is part of Hyundai Motor’s updated five-year plan, “Strategy 2025,” to become a leading future mobility provider.

Write to Byung-Uk Do at

dodo@hankyung.com

Yeonhee Kim edited this article.