[비즈한국] KG Group is acquiring K Car381970, the largest direct-managed used car platform in Korea. The acquiring entity is KG Steel016380, a steel affiliate of KG Group. On April 1st, KG Steel disclosed that it signed a stock purchase agreement (SPA) on March 31st with private equity firm Hahn & Co. Auto Holdings to purchase 35,245,670 shares of K Car common stock (a 72.19% stake) for 550 billion won. The purchase price per share is 15,605 won, and the transaction is expected to close on June 30th. This deal is being conducted through a joint investment method with Cactus Private Equity (PE).
KG Group stated that through this acquisition, it aims to build a business structure that connects automotive manufacturing, distribution, and IT platforms. The group plans to secure a system that covers the entire automotive industry chain—from production to distribution, finance, and services—by combining the vehicle production capabilities of KG Mobility003620 (formerly SsangYong Motor), the online/offline used car distribution platform of K Car, and the IT capabilities of KG ICT. KG Group described this as an “integrated mobility business structure.”
A notable aspect is that the acquiring entity is KG Steel, not KG Mobility. In its disclosure, KG Steel stated that the purpose of the K Car acquisition is to diversify its business portfolio and secure future growth engines. KG Group also explained that it plans to supplement the volatility of the steel industry and diversify its business portfolio based on K Car’s stable cash flow generation.
K Car is a company that has grown by focusing on the direct-managed used car sales model. It has operated a structure where the company directly purchases and sells vehicles, and it recorded approximately 2.4388 trillion won in revenue as of last year. KG Group plans to expand its business scope to overall used car distribution and mobility services by combining the distribution platform maintained by K Car with the production and service network of KG Mobility. KG Group also presented the possibility of international expansion by utilizing KG Mobility's overseas network and KG Steel's global business base.
This deal is significant in that KG Group is engaging in an M&A that moves beyond finished car manufacturing to secure a distribution platform. As KG Group has already entered the automotive manufacturing industry through KG Mobility, the acquisition of K Car allows it to unify new car production and used car distribution. By integrating KG ICT to add platform functionality, the group is setting up a structure to expand its business scope across the entire automotive industry value chain.
The seller, Hahn & Company, acquired the SK Encar direct management division in 2018, changed the company name to K Car, and took it public in 2021. By transferring its stake this time, K Car’s largest shareholder will change to KG Group. The market views this transaction as a case where a used car platform has moved from being a private equity asset to the hands of a strategic investor (SI).