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Hyundai, Santander to acquire German car rental firm for $170 mn

Feb 20, 2020 (Gmt+09:00)

Spain’s Banco Santander and Hyundai Capital Services Inc. have decided to buy a controlling stake in Sixt Leasing SE, a unit of German car rental company Sixt SE, for about 200 billion won ($167 million), according to investment banking sources on Feb. 19.

The purchase will be made through the joint venture Hyundai Capital Bank Europe, of which Santander bought 51% in 2019. They will split the payment to 50:50.

Both Santander and Hyundai had contributed 103.7 billion won respectively to the JV late last year to beef up its capital base in a preparation for the acquisition.

Sixt Leasing is 41.9% owned by Sixt. Despite its steady revenue growth to an estimated 832 million euros, operating profits have been on the decline to a projected 41.5 million euros in 2019.

The acquisition is aimed at strengthening Hyundai Capital’s European operations based on Germany after Brexit, as Hyundai Motor Co. and Kia Motors Corp. of the Hyundai Motor Group are gaining market share in Europe.

Hyundai Capital is the auto financing arm of the Hyundai Motor Group.

The two Korean carmakers have posted about 5% growth in sales in Europe per year since 2010, taking 6.8% of the market in 2019. It ranked as the fourth biggest carmaker in Europe after Volkswagen Group, Groupe PSA and Ford Motor Company, according to the European Automobile Manufacturers' Association.

“Despite the steady sales growth of Hyundai and Kia in Europe, Hyundai Capital Bank Europe had just played a role of the broker between car buyers and local financing companies,” said a leasing industry source. “Once the entity secures a leasing business network, it will be able to begin creating synergy effects with car sales in full swing.”

Both Santander and Hyundai Capital also run joint ventures in the UK and Brazil.

By Dong-hun Lee and Dae-hun Lee

(Photo: Getty Images Bank)

Yeonhee Kim edited this article

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