Hanwha Solutions, Galleria Co., Ltd. and Hanwha Urban Development Merger (Comprehensive)

Maximizing Management Efficiency through Efficient Resource Allocation and Rapid Decision-Making
Expanding Premium-Based Retail and Development Projects from Materials and Solar Energy

[Asia Economy Reporter Hwang Yoon-joo] Hanwha Solutions is merging its subsidiary Hanwha Galleria. Another subsidiary, Hanwha Urban Development, will also undergo a spin-off into the Asset Development Division and the Ulju Land Division, followed by a merger of the Asset Development Division.

Hanwha Solutions announced on the 8th that it held a board meeting and approved the merger of Hanwha Galleria and Hanwha Urban Development, tentatively scheduled for April next year. These subsidiaries are 100% owned by Hanwha Solutions. The merger was decided with the aim of maximizing management efficiency through efficient allocation of resources between divisions and simplification of the decision-making structure.

◆ Hanwha Galleria Expected to Improve Capital Raising Conditions through Merger

The merger of Hanwha Galleria is interpreted as an effort to improve capital raising conditions. Hanwha Galleria operated department stores, wholesale and retail businesses, and duty-free shops but closed its duty-free business last year due to deteriorating performance. Since then, it has been working on improving its financial structure.

A Hanwha Solutions official explained, "The biggest issue for Hanwha Galleria is the cost of capital raising. If merged with Hanwha Solutions, its credit rating could improve compared to when it existed as a subsidiary, which is advantageous for capital raising costs."

Hanwha Galleria is currently focusing on the premium retail sector. Although the operating environment has been unfavorable this year due to the impact of COVID-19, it is expected to be advantageous for new business investments in the future. There are no plans for workforce restructuring, but there is a possibility of personnel reallocation depending on circumstances.

◆ Hanwha Solutions to Link Hanwha Urban Development’s Industrial Complex Development with Renewable Energy Business

Hanwha Solutions expects synergy in the renewable energy business through the merger with Hanwha Urban Development. When Hanwha Urban Development develops industrial complexes, Hanwha Solutions will carry out solar power facility work.

Following the government's eco-friendly and renewable energy policies, it is anticipated that the scope of energy businesses such as solar power can be expanded during industrial complex development. Hanwha Solutions plans to continuously advance the existing materials and solar power business structure after the merger.

Hanwha Solutions is led by President Kim Dong-kwan, son of Hanwha Group Chairman Kim Seung-yeon. President Kim has contributed to business growth by handling overseas sales from the early stages of the solar power business.

Except for the urban development division, the other five divisions will operate under individual CEO systems, while the urban development division will be managed under a division head system considering the scale of the business. The Ulju Land Division is currently conducting business and is excluded from the absorption merger.

Meanwhile, with this merger, Hanwha Solutions will operate a total of six divisions, adding two divisions (Galleria and Urban Development) to the existing four divisions (Chemical, Q CELLS, Advanced Materials, Strategy). Hanwha Galleria and Hanwha Urban Development are 100% consolidated subsidiaries of Hanwha Solutions, so there will be no change in the financial structure of the newly merged corporation.

This content was produced with the assistance of AI translation services.