By Hyunjoo Jin and Heekyong Yang
SEOUL (Reuters) - Hyundai Motor Group and its chairman have agreed to buy a controlling stake in Boston Dynamics from SoftBank Group Corp in a deal that values the U.S.-based robot maker at $1.1 billion.
The South Korean automaker group said on Friday the purchase would help it expand automation in its vehicle factories and design autonomous cars, drones and robots, as it seeks to turn itself from a manufacturer into a broader mobility service provider.
Hyundai Motor Group said the deal, which involves a new share issue, would give the company and its chief a combined 80% stake in Boston Dynamics, while Softbank (OTC:SFTBY) will retain 20%.
Newly promoted Hyundai Motor Group Chairman Euisun Chung has pledged to reduce reliance on traditional car manufacturing. He has said robotics would account for 20% of the firm's future business, while car-making would account for 50% and urban air transport would make up the remaining 30%.
Chung will own a 20% stake in Boston Dynamics, while Hyundai Motor and its affiliates Hyundai Mobis and Hyundai Glovis will hold a combined 60% stake.
Softbank Group Chief Executive Masayoshi Son said the partnership with Hyundai Motor Group would accelerate the robot maker's path to commercialisation.
Boston Dynamics, which was spun out from the Massachusetts Institute of Technology in 1992, was bought by Google (NASDAQ:GOOGL) in 2013 and sold to SoftBank in 2017.
The company's products include Spot, a dog-like robot that can climb stairs. The firm has gained media attention although the company has struggled to build a commercial business.
Boston Dynamics reported a net loss of $103 million for the fiscal year ending in March 2020, widening its losses by more than 60% from a year earlier.
The transaction, subject to regulatory approvals and other customary closing conditions, is expected to close by June 2021.
'INNOVATION RACE'
Boston Dynamics' clients include Ford Motor (NYSE:F) Co, which leased two Spot robots in July as part of a pilot programme.
Last year, Ford Motor also said it was partnering with walking robot maker Agility Robotics as it designs a planned fleet of self-driving delivery vans that will drop packages at the doorsteps of people’s homes.
The Boston Dynamics deal is the latest pullback by SoftBank from operating businesses as Son focuses on investing.
It marks the fading in SoftBank's robotics ambitions, which were talked up by Son. It leaves the group's own rump robotics business, which includes humanoid robot Pepper, looking increasingly isolated.
For Hyundai Motor Group, this is the latest in a flurry of deals under Chung, who pledged to transform the automaker into a mobility provider, amid threats from electric carmaker Tesla (NASDAQ:TSLA) Inc and tech firms with ride-sharing, self-driving and other technologies.
"Automakers are in an innovation race. Hyundai is a late-comer to the race, and it seems that they want to showcase that they can do it, rather than trying to generate money from the robot business," said mobility consultant Cha Doo-won.
Hyundai Motor Group has developed a wearable robot to reduce fatigue for factory workers and ran pilot programmes at its U.S. plants.
In January, Hyundai Motor Group announced it had partnered with Uber (NYSE:UBER) to develop electric air taxis, but the U.S. firm said this week it would sell its loss-making flying taxi unit to Joby Aviation, an electric passenger aircraft developer.
(1 = 1,087.2200 won)