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 The Hyundai-led group - which includes Kia Motors Corp and Hyundai
Mobis Co - agreed to the price, more than triple the appraised
amount, prompting a sharp sell-off in the companies' shares.
About 11.6 trillion Korean won ($11.11 billion) have been wiped of
the market values of the companies since the purchase was announced
last week.
Labor union employees, who make up the bulk of the companies'
workforce, voted on Friday to extend a strike into next week in show
of disapproval of the purchase which will be used to house a new
headquarters, hotel and theme park complex.
"Building an integrated control tower will enhance work efficiency
and brand value," Hyundai Motor said in its regulatory filing on
Friday.
The Hyundai-led consortium, which beat Samsung Electronics to
buy the plot in the capital's high-end Gangnam district, plans to
ink the deal with the state-run Korea Electric Power Corp (KEPCO)
later on Friday.
Shares of Hyundai Motor ended down 1.3 percent at 187,000 won each
on Friday, their lowest level in 17 months. Kia Motors slipped 0.8
percent, and Hyundai Mobis was up 0.6 percent.
The $10 billion price-tag is equivalent to selling nearly half a
million of Hyundai's flagship Sonata sedans, and nearly two years of
combined wages for Hyundai's 63,099 employees in Korea, according to
Reuters' calculation.
Hyundai Motor will pay 55 percent of the price, followed by Hyundai
Mobis Co Ltd with 25 percent and Kia Motors Corp with 20 percent,
the companies said. They did not disclose whether the board approval
was unanimous.
The boards of the three companies had approved bidding at the Sept.
18 auction without knowing the price, which was deemed confidential,
four board members told Reuters earlier.
Board disapproval is rare at Korea's family-owned conglomerates, or
chaebols.
WORKERS EXTEND STRIKE
The land deal led to the domestic unions of Hyundai Motor and Kia
Motors resuming partial strikes this week, clouding the outlook for
annual wage talks.
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Workers "are angered by the astronomical amount of money" to be
spent on the land, Kia's union said.
Hyundai Motor's labor union said on Friday it would stage a partial
strike from Monday through Thursday next week.
Hyundai, the world's fifth-biggest automaker along with its
affiliate Kia, has been hit by strikes in all but four years of the
union's 27-year history, although they usually make up losses with
extra work later that year.
The stoppages comes as Hyundai and Kia are planning to build new
factories in China and Mexico, closer to export markets and where
wages are lower than in South Korea.
Recurring labor disputes, high wages at home and strong currency are
expected to put further pressure on the automaker to accelerate
overseas production. Hyundai made 62 percent of its cars last year
overseas, up from 20 percent in 2004.
Since annual wage talks began in early June, Hyundai Motor and union
negotiators have wrangled over a new wage calculation, which the
company says would sharply increase labor costs.
Hyundai's domestic employees, excluding executives, earn an average
94 million won ($90,419) per year.
(Reporting by Hyunjoo Jin; Editing by Jeremy Laurence)
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