Hyundai Poised to Buy Out SoftBank's Boston Dynamics Stake as Deadline Looms

[Korea Financial Times, Kim JaeHun] The deadline for SoftBank to exercise its put option on its remaining stake in Boston Dynamics is fast approaching. Industry observers expect Hyundai Motor Group to acquire SoftBank's remaining shares, bringing the robotics company fully under its wing as a wholly owned subsidiary.

Boston Dynamics is widely viewed as a key piece in Hyundai Motor Group Chairman Chung Eui-sun's succession plans and in resolving the group's circular shareholding structure. For this reason, analysts expect Hyundai Motor Group to formalize a full-fledged listing plan alongside its acquisition of SoftBank's remaining stake.

There is, however, a variable: the government's recently announced reform bill on dual listings of subsidiaries. While some voices in the market suggest the bill could give momentum to a U.S. listing for Boston Dynamics, given its significant impact on the stock price of a group that has declared a full pivot toward robotics, various forecasts are emerging regarding both the timing and direction of any listing.

Where Will SoftBank's Remaining 9.65% Stake Go?

According to Hyundai Motor Group on the 15th, Boston Dynamics shareholders may exercise their put options through July 20. The company's shareholders consist of Hyundai Motor (28%), Chairman Chung Eui-sun (22.6%), Kia (17.2%), Hyundai Mobis (11.3%), Hyundai Glovis (11.25%), and SoftBank (9.65%).

Hyundai Motor Group and Chairman Chung Eui-sun previously invested roughly KRW 1 trillion in 2021 to acquire approximately 80% of Boston Dynamics from SoftBank. The group subsequently expanded its stake to around 90% through rights offerings and other means.

As part of the Boston Dynamics deal, Hyundai Motor Group and SoftBank signed a contract that included a put option allowing SoftBank to sell back its remaining stake — and a call option allowing Hyundai Motor Group to buy it — in the event a U.S. listing did not materialize.

With SoftBank's put option deadline drawing near, industry watchers expect Hyundai Motor Group to acquire the entire remaining 9.65% stake. The total outlay is estimated at approximately KRW 500 billion, based on Boston Dynamics' roughly KRW 5 trillion valuation at the time of the original acquisition.

Following the January unveiling of its Atlas humanoid robot this year, Boston Dynamics' valuation as estimated by securities analysts has climbed as high as KRW 100 trillion. For Hyundai Motor Group, this would mean absorbing Boston Dynamics as a wholly owned subsidiary at a relatively low price.

By bringing Boston Dynamics fully under its umbrella, Hyundai Motor Group could move more swiftly on major decisions such as production investment and workforce expansion. It would also reduce concerns over equity dilution ahead of a future Nasdaq listing and allow the group to fully capture any future gains in corporate value.

Boston Dynamics is seen as a critical factor both in funding Chairman Chung Eui-sun's succession and in resolving the group's circular shareholding structure going forward. For this reason, the company is expected to pursue a full listing process once it becomes a wholly owned subsidiary. Hyundai Motor Group is reportedly already laying the groundwork for a listing, having formed a task force led by Vice Chairman Jang Jae-hoon.

Dual-Listing Reform Bill: What It Means for Boston Dynamics' Listing

With Hyundai Motor Group's full acquisition of Boston Dynamics now considered all but certain, attention is turning to the timing of a future IPO. However, the government's recently announced reform bill on dual listings of subsidiaries has introduced new variables.

On the 6th, the Financial Services Commission (FSC) and the Korea Exchange unveiled detailed guidelines banning dual listings in principle while allowing exceptions. The bill will undergo a public notice period through the 14th before final implementation, expected as early as the end of this month, following resolutions by the Securities and Futures Commission and the FSC.

At the core of the reform is a requirement for shareholder approval when a subsidiary created through a spin-off (physical division) pursues an IPO. Under the so-called "3% rule," the parent company's largest shareholder would have voting rights capped at 3% of total issued shares in such a vote — a threshold that, given the difficulty large conglomerates typically face in securing sufficient friendly shareholder support, could make passage at a general shareholders' meeting practically impossible.

The parent company's board would also be subject to five fiduciary duties toward shareholders when listing a subsidiary, including conducting a shareholder impact assessment. These five duties comprise: (1) conducting a shareholder impact assessment, (2) preparing adequate shareholder protection measures, (3) confirming shareholder communication has taken place, (4) holding a board vote and notifying the subsidiary of the outcome, and (5) disclosing compliance at each stage. The same requirements would apply when listing a subsidiary on an overseas exchange.

The reform bill divides dual listings into two categories — subsidiaries created through spin-offs and "general subsidiaries" brought in through M&A or similar means — establishing a more granular regulatory framework for each. Boston Dynamics, having joined the group through acquisition rather than a spin-off, would be regulated as a general subsidiary.

General subsidiaries face comparatively lighter shareholder-approval obligations. Even without shareholder consent, a listing — domestic or overseas — is possible so long as the registration statement passes review. That said, given the government's current emphasis on shareholder value protection, regulators may still demand a higher bar for registration statements.

There are exceptions built into the bill. Under the reform, "low-weight" subsidiaries — those whose revenue, operating profit, and assets each account for less than 10% of the parent company's — are fully exempted from the shareholder-approval requirement, provided the board has passed a resolution.

This has led some in the industry to suggest Chairman Chung Eui-sun could move up his timeline for a Nasdaq listing of Boston Dynamics. Market watchers generally expect this to occur around 2028, once Atlas begins full-scale commercialization.

At present, Boston Dynamics accounts for only a negligible share of Hyundai Motor's annual revenue as its largest shareholder. But once commercialization ramps up and consolidated revenue grows, the exemption from shareholder-approval requirements could disappear.

Securities analysts estimate that once Atlas is commercialized, Boston Dynamics' annual revenue could range from roughly KRW 19 trillion to as much as KRW 50 trillion. Given that Hyundai Motor's revenue last year totaled KRW 186.2545 trillion, that would exceed the 10% revenue-share threshold.

One investment banking industry source said the new reform effectively establishes a pathway for setting listing guidelines for Boston Dynamics, and that with the company's projected market valuation of KRW 100–200 trillion and its current exemption from shareholder-approval requirements under the dual-listing rules, its IPO could gain considerable momentum.

Others argue that, from the standpoint of Chairman Chung Eui-sun's succession plans, there is little downside even if Boston Dynamics' listing is delayed.

The leading scenario for resolving Chairman Chung's succession and the group's circular shareholding structure — currently structured as Hyundai Mobis → Hyundai Motor → Kia → Hyundai Mobis — involves Chung expanding his stake in Hyundai Mobis and acquiring the Hyundai Mobis shares currently held by Kia.

Market observers note that Chairman Chung already holds substantial ammunition for restructuring the group's governance beyond Boston Dynamics. He is the largest individual shareholder in Hyundai Glovis, with a 20% stake, and also holds significant stakes in Hyundai Engineering (11.72%) and Hyundai Autoever (7.33%), among other lucrative affiliates. Annual dividends from group companies, which run into the hundreds of billions of won, provide a further reliable source of cash.

Ultimately, Boston Dynamics is less the "entirety" of Chung's succession funding than a "wild card" that could dramatically accelerate the pace of governance restructuring once its corporate value is fully realized.

Meanwhile, shares of Hyundai Motor Group affiliates caught up in the circular shareholding structure — including Hyundai Motor, Kia, and Hyundai Mobis — have already risen on a "Boston Dynamics premium." For Chairman Chung, rising valuations at Hyundai Mobis and Kia are not unambiguously good news.

The higher the premium applied to affiliate share prices grows following Atlas's commercialization, the greater the potential dilution to Boston Dynamics' own share price once it eventually lists. Offsetting this would require parallel measures to protect shareholder rights in order to secure shareholder approval.

Another investment banking industry source said the reform bill effectively places Chairman Chung and Hyundai Motor Group at the intersection of a complex set of calculations — balancing the acceleration of the group's future pivot to robotics against the protection of shareholder rights — and that whichever path is chosen, the key will be how genuinely credible the measures for protecting shareholder interests turn out to be.

Meanwhile, a Hyundai Motor Group official said that no specific decisions have yet been made regarding the acquisition of Boston Dynamics' remaining stake or any future listing plans.

Kim JaeHun (rlqm93@fntimes.com)