Hyundai Motor, KT in $540 million share swap deal for future mobility

South Korea’s Hyundai Motor Group and telecom giant KT Corp. have agreed to expand their future mobility partnership through a 750 billion won ($540 million) share swap deal.

Under the agreement reached on Wednesday, KT will swap its shares amounting to a 7.7% stake for 1.04% of Hyundai Motor Co. shares and a 1.46% stake in Hyundai Mobis Co., the carmaker’s auto parts affiliate.

The deal is aimed at jointly developing the sixth-generation (6G) communication standard optimized for autonomous driving and preparing a satellite-based future air mobility communications infrastructure.

The 6G data transmission speed is up to 50 times faster than that of current 5G mobile communications.

The auto industry is witnessing a paradigm shift toward mobility, electrification, connectivity and autonomous driving (MECA), and the two companies expect to lead the industry by focusing on their respective strengths.

Under the agreement, Hyundai and KT also agreed to jointly work on advanced air mobility (AAM) communications infrastructure based on satellites.

KT will build control and communications networks essential for AAM operation in connection with its own communications satellites.

Hyundai Motor Group will be in charge of aircraft development and construction of vertiports, or vertical take-off and landing areas.

In September 2022, Hyundai Motor Group and KT formed a consortium for a government-led Korean Urban Air Mobility (UAM) project with a view to commercializing it by 2025.

Write to Seung-Woo Lee at leeswoo@hankyung.com
In-Soo Nam edited this article.