Hyundai group under pressure from U.S. activist hedge fund with $1 billion stake

3 min readUpdated May 19, 2025Apr 17, 20183:45 AM

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A unit of U.S. activist hedge fund Elliott Management revealed on Wednesday that it holds more than $1 billion worth of shares in key affiliates of South Korea’s Hyundai Motor Group and called for more rapid reform of the auto giant’s governance.

It is Elliott’s latest challenge to South Korea’s family-run conglomerates after it forced Samsung Electronics to increase shareholder returns in 2017, and comes amid a government campaign to boost investors’ power in a country where shareholder activism is rare.

Elliott Advisors called for a “more detailed roadmap” as to how Hyundai Motor Group will “improve corporate governance, optimize balance sheets, and enhance capital returns” at Hyundai Mobis, Hyundai Motor and Kia Motors.

The fund did not provide a breakdown of its stakes in Hyundai’s three affiliates but its over $1 billion worth of shares account for around 1.5 percent of the total market value of the three firms.

Hyundai Mobis shares jumped as much as 6.1 percent to their highest since Jan. 25 in the wake of the announcement. Hyundai Motor rose 4.9 percent, its highest in three weeks, while Kia Motors gained 3.8 percent in morning trade in Seoul. Hyundai Glovis shares rose as much as 4.8 percent.

“I see Elliott’s call as positive, as it should enhance shareholder value,” said Kim Sung-soo, a fund manager at LS Asset Management.

“Elliott has declared war against Hyundai but it has not made detailed demands, so further discussions need to be seen.”

Auto-to-steel giant Hyundai Motor Group announced a plan last week to streamline its complex ownership structure as it responds to calls from the government and investors for greater transparency and better governance at family-controlled conglomerates.

But worries that the plan would benefit the parent group’s controlling family ahead of investors have hit the share prices of group companies such as parts supplier Hyundai Mobis.

While Elliott said it was pleased that Hyundai Motor Group had taken a first step toward reform, it added in a statement that “more needs to be done to benefit the companies and stakeholders”.

“I see Elliott’s call as positive, as it should enhance shareholder value,”

“Elliott looks forward to engaging with management and other stakeholders directly on these issues, and to offering recommendations regarding the proposed plan,” the hedge fund said.

Hyundai Motor Group responded that it was “confident” its restructuring plan would enhance shareholder value, and promised to communicate with investors at home and abroad.

Last year, South Korea’s new antitrust chief told Reuters he had been in talks with Hyundai Motor Group about unwinding its circular shareholdings, which critics say give too much power to the controlling family at the expense of shareholders.

Under Hyundai’s plan, Hyundai Mobis is to spin off its domestic module and after-service parts businesses and merge them with logistics affiliate Hyundai Glovis, which is personally backed by Hyundai’s controlling Chung family.

But some investors complained that Mobis could be giving away the most profitable part of its business too cheaply.

The plan is yet to be approved by shareholders.

After the merger, Group Chairman Chung Mong-koo and his son Chung Eui-sun, who is vice-chairman, will buy stakes in Mobis held by other affiliates Kia Motors, Glovis and Hyundai Steel .

The group has not announced when the family members would buy the Mobis stakes.

Elliott’s intervention is another headache for Hyundai, which is already struggling with slowing sales in China and the United States and Seoul’s diplomatic row with Beijing last year.

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What this means

Elliott Management's challenge is a high-stakes move likely to work, given its past success with Samsung and South Korea's government campaign boosting investor power. This pressures Hyundai's controlling family to significantly revise their proposed restructuring, which investors currently view as favouring the Chungs over Mobis shareholders. Unlike recent retail acquisitions like Reliance's Anomaly or Carlyle's KFC Korea, this move targets corporate governance rather than market expansion, reflecting a different form of investor engagement. The key risk for Hyundai is alienating crucial institutional investors. Retail executives should monitor the specifics of Hyundai's revised governance plan to see if it truly enhances shareholder value for Mobis before the proposed merger.

Aiko Tanaka · Retail News Asia newsroom

Questions & Answers

What specifically is Elliott Management asking Hyundai Motor Group to do?

The fund called for a more detailed roadmap on how Hyundai Motor Group plans to improve corporate governance, optimize balance sheets, and enhance capital returns at Hyundai Mobis, Hyundai Motor, and Kia Motors.

How much of Hyundai Motor Group's market value does Elliott Management's stake represent?

Elliott's stake of over $1 billion worth of shares accounts for approximately 1.5 percent of the total market value of the three affiliates it has invested in: Hyundai Mobis, Hyundai Motor, and Kia Motors.

What is the primary concern for investors regarding Hyundai Motor Group’s proposed restructuring plan?

Investors are worried that the restructuring plan would primarily benefit the parent group’s controlling family rather than all investors. Some also believe Mobis might be divesting its profitable business too cheaply.

What is Hyundai Motor Group's response to Elliott Management's intervention?

Hyundai Motor Group stated it was confident its restructuring plan would enhance shareholder value. It also promised to communicate with both domestic and international investors regarding the proposed changes.

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