The Hyundai Group led by Hyun Jeong-Eun was named Tuesday as preferred bidder for South Korea's largest builder, triumphing over a rival offer from the giant carmaking group headed by her brother-in-law.
The decision follows a family feud over the former Hyundai empire, which was split into separate units after the death of its billionaire founder Chung Ju-Yung in 2001.
"I will endeavour to restore the glory of our group," Hyun said in a statement, praising creditors for making a "fair and transparent" decision in favouring her bid for Hyundai Engineering and Construction.
Hyundai Motor chief Chung Mong-Koo and his widowed sister-in-law had gone head-to-head with television advertising campaigns to push their rival claims.
Along with Hyundai's shipbuilding unit, Hyundai Motor was hived off almost a decade ago as a separate entity.
With affiliate Kia Motors, it is now the world's fifth largest carmaker and was far better placed to fund the purchase of the construction firm -- which came under creditor control in a debt-for-equity swap in 2001.
Hyun's Hyundai Group meanwhile includes a shipping firm, a brokerage, a tour company that operates projects in North Korea and an elevator maker.
Shares in its units fell sharply on fears it has bitten off more than it can chew.
"As the Hyundai Group is expected to acquire the construction firm in a heavily leveraged buyout, investors appear dissatisfied with the outcome," an analyst told Down Jones Newswires on condition of anonymity.
Hyundai Merchant Marine plunged by the 15 per cent daily limit, Hyundai Elevator fell 12 per cent and Hyundai Securities was down 14 per cent.
Hyundai Engineering and construction fell 15 per cent on concerns it has gone to a less financially healthy owner.
Its creditors said they would complete the process of selling the 34.88 per cent stake early next year.
Yonhap news agency said Hyundai Group's offer is worth about 5.5 trillion won ($4.87 billion) but the group declined to comment.
The auto group, sitting on some $4.3 billion in cash, was in a far better position to bid and insisted the builder would help diversify its portfolio.
But creditors had said the bid price would not be the only deciding factor. The Hyundai Group had appealed to public sentiment in asserting its right to control the construction firm.
Hyundai Motor appeared to take its defeat gracefully, expressing regret but saying creditors made the right decision. Its shares ended up 1.4 per cent after avoiding the hefty acquisition.
The Hyundai Group has raised funds by selling off non-essential assets or issuing corporate bonds.
It has been hit by cash shortages because of some troubled projects, including a suspension of cross-border tours and difficulties over a jointly-run industrial estate in North Korea.