[Edaily Reporter Kim Hyung-il ] Global mobility parts company NEOOTO Co., Ltd.(212560)announced on the 7th that it will make its affiliate, Auto Industry, a wholly-owned subsidiary. The company plans to integrate the manufacturing capabilities of both companies to unify the value chain and expand into new business areas.

NEOOTO Co., Ltd. held a board meeting on the 4th and resolved to enter into a comprehensive stock swap agreement to make AutoIndustry a wholly-owned subsidiary. The comprehensive stock swap will be conducted by NEOOTO Co., Ltd. issuing new shares in exchange for the shares held by AutoIndustry’s shareholders. The exchange ratio is 1 to 91.3667379, meaning that for every one share of Auto Industry, 91.3667379 shares of NEOOTO Co., Ltd. will be allocated.

This comprehensive stock swap was initiated to unify the value chain, generate business synergies based on vertical integration, and enhance corporate and shareholder value. NEOOTO Co., Ltd. plans to integrate Auto Industry’s manufacturing capabilities for forged and turned parts with its own capabilities in ultra-precision machining, finished product manufacturing, and assembly.

Through this, the two companies plan to rebuild an optimized production system and unify functions such as production, procurement, and investment. NEOOTO Co., Ltd. aims to reduce costs and strengthen profitability, while the integrated Auto Group has set a goal of achieving annual revenue of 1 trillion won by 2030.

They will also pursue research and development (R&D) synergies to expand into new businesses. By leveraging their integrated production infrastructure, the two companies plan to minimize duplicate investments in equipment and jointly develop future mobility drive modules by combining their existing EV gearbox manufacturing technologies.

They will also expand their robotics components business. In January, NEOOTO Co., Ltd. expanded its “Robotics Team,” previously organized under its research institute, into the “Robotics Business Division.” Building on its accumulated expertise in ultra-fine precision machining and mass-production technology for gearboxes, the Robotics Business Division plans to focus on fostering the business of ultra-precision gearbox components for robots and accelerate its entry into the global robotics components market.

Based on combined figures for both companies, projected 2025 revenue is 662.3 billion won, operating profit is 32.3 billion won, and total assets are 549.2 billion won. For NEOOTO Co., Ltd. alone, these figures represent 2.9 times, 2.4 times, and 2.5 times the respective figures.

NEOOTO Co., Ltd. plans to use this expansion as a springboard to proactively prepare for the introduction of the KOSDAQ promotion-demotion system in 2027. Building on its expanded scale, the company intends to solidify its foundation for entering the premium segment, overcome the liquidity limitations associated with being a small-cap stock, and work to enhance corporate value and maximize shareholder value.

The company will also focus on increasing shareholder value through its shareholder return policy. Following the completion of the stock swap, it will actively review various value-enhancement measures to boost shareholder value and has set a target of raising the cash dividend payout ratio—which stood at 15.9% based on the 2025 fiscal year—to 20% or higher.

NEOOTO Co., Ltd. stated, “This comprehensive stock swap is a major turning point aimed at connecting the previously fragmented mobility value chain into a single entity to create unparalleled business synergies,” adding, “Based on the operating profit and production efficiency maximized through the integration, we will concentrate our capabilities on new future robot parts businesses to have the fundamental growth potential of the integrated Auto Group reevaluated and maximize shareholder value.”

Meanwhile, NEOOTO Co., Ltd. plans to hold a shareholder briefing following the shareholder record date on the 21st. Subsequently, after holding an extraordinary general meeting of shareholders on December 16 to approve the stock swap, the company plans to finalize the stock swap on February 1 of next year.