Hyundai Motor Group has acquired Boston Dynamics from SoftBank Group in a deal that aligns with its focus on robotics for future growth, but also could bring some challenges.

Hyundai Motor Group said on Friday (December 11) that it had agreed to buy 80% of Boston Dynamics. Hyundai Motor, Hyundai Mobis and Hyundai Glovis will own stakes of 30%, 20% and 10% respectively, while the remaining 20% will be held by group chairman Chung Eui-sun. Goldman Sachs and local law firm Kim & Chang provided advice to Hyundai Motor Group. Latham & Watkins also acted as a legal adviser.

The deal could be the first of many mergers and acquisitions (M&As) by the South Korean conglomerate, which is increasingly adopting an inorganic growth strategy – relying on takeovers rather than business activity – in a move generally backed by industry watchers.

But it may not be easy. Previous owners Google and SoftBank both offloaded Boston Dynamics without achieving much progress in commercializing its robot technology, while Hyundai Motor Group’s lack of experience with cross-border M&As is another factor that makes some observers cast doubt on the deal.

Boston Dynamics was founded in 1992 by Marc Raibert, a former professor at the Massachusetts Institute of Technology, as a spin-off from the university. The company is known for developing robots that mimic movements of dogs and humans, including the famous BigDog, a quadruped robot built for the U.S. military in 2005 with funding from the Defense Advanced Research Projects Agency. BigDog was eventually rejected for being too loud for combat.

The company was acquired by Google for an undisclosed amount in 2013. The deal was led by Andy Rubin, Android co-founder and then vice-president of engineering, as part of the tech giant’s buying spree of robotics companies during 2013 and 2014. However, robots became increasingly disconnected from Google’s core business after Rubin left in 2014 and Boston Dynamics was sold to SoftBank in 2017, with terms of the deal undisclosed.

Boston Dynamics purchased 3D vision startup Kinema Systems last year in an effort to develop and sell advanced robotics products for the logistics market. The deal enabled it to acquire Kinema’s Pick system, a deep-learning based solution for robotic depalletizing.

But the company showed little progress in commercializing its robotics technology under SoftBank’s ownership. Boston Dynamics has reportedly recorded quarterly revenue of about $168 million since the third quarter in 2019.

Focus on robotics

The acquisition of Boston Dynamics is the first buyout by Hyundai Motor Group since its takeover of Hyundai Engineering & Construction in 2010, and the first cross-border deal by the conglomerate under chairman Chung Eui-sun, who took office two months ago.

Chung, the son of former chairman Chung Mong-koo, had been the de facto leader of the conglomerate since 2018, when he started serving as executive vice chairman. In this period Hyundai Motor Co, the group’s crown jewel, announced partnerships and collaborations with various industry players.

News of Hyundai Motor’s intention to buy Boston Dynamics, which first surfaced in November, was met with mixed responses. Some cast doubt, citing the conglomerate’s lack of experience in overseas buyouts, but others were positive about prospects for the deal because of Chung’s strong desire for new technologies.

Chung said at a town hall meeting last year that traditional cars are likely to account for only 50% of vehicles driven during the company’s future growth, with private air vehicles and robotics having shares of 30% and 20% respectively.

The deal came after months of effort by Hyundai Motor Group to build relationships with SoftBank and Boston Dynamics, combined with SoftBank’s plans to sell assets to amass cash. It is expected to allow Hyundai Motor Group to combine advanced robotics technologies with its various businesses, if there is a successful post-merger integration.

“Chairman Chung Eui-sun’s ownership (of Boston Dynamics) is to show the group’s desire to continue to invest in robotics and strengthen responsible management,” the group said in its announcement. “This will also help to attract global talent and high-quality suppliers.” (Reporting by Gyuoung-tae Kim)