Hyundai Motor Co, Kia Motors Corp and Hyundai Mobis Co bought a plot of land in the high-end Gangnam district to become the site of the companies' headquarters, a hotel and a theme park.
The deal is worth 10.55 trillion won ($ 10.12 billion) and is considered to be Asia's biggest property deal. The price is reportedly three times the actual cost of the land.
The transaction allegedly resulted in rapid selling of Hyundai Group's shares in the market. The market values of the companies dropped down 11.6 trillion Korean won ($11.11 billion) after the acquisition was announced.
The deal also stirred turmoil within the companies' labor union, which comprise of majority of the companies' workforce.
The union plans to extend their ongoing boycott until Thursday next week as a sign of dissatisfaction for the purchase which they deem overpriced.
They were reportedly "angered by the astronomical amount of money" that went in buying the land, according to Kia's labor union.
Hyundai Motor beg to differ, as a statement released during its regulatory filing on Friday revealed "Building an integrated control tower will enhance work efficiency and brand value."
After the transaction, Hyundai Motor dropped down 1.3 percent at 187,000 won on Friday, the lowest it has been for the past 17 months. Kia Motors also fell 0.8 percent. Hyundai Motors, on the other hand, went up 0.6 percent.
Hyundai Motor reportedly contributed 55 percent of the cost of the land, followed by Hyundai Mobis Co with 25 percent and Kia Motors Corp with 20 percent.
The details regarding unanimity of the purchase were not revealed.
Hyundai and Kia were never new to protests like these. Workers staged a strike when the companies targeted to put up new factories in China and Mexico where it salaries are less expensive than South Korea.
Repeating labor issues, high wages and strong currency will push the companies to manufacture cars abroad.
Hyundai's employees in South Korea, which includes executives reportedly make a total of 94 million won ($90,419) per year.
