Daewoo Shipbuilding & Marine Engineering, Virtually Under Hanwha's Control... "No Additional Acquisition Bidders"

by Lee Myeonghwan

Published 17 Oct.2022 17:42(KST)

Hanwha, Prospects for Final Contract After Due Diligence

The Daewoo Shipbuilding & Marine Engineering Seoul office as of July 19. / Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Lee Myunghwan] Hanwha Group is set to become the new owner of Daewoo Shipbuilding & Marine Engineering (DSME). This follows the absence of any competing bidders seeking to acquire DSME's management rights.

On the 17th, DSME announced, "Regarding investment attraction (third-party allotment paid-in capital increase), we designated six companies, including Hanwha Aerospace, as conditional prospective investors and conducted a competitive bidding process. As no submissions were received by the deadline for letters of intent, the sole acquirer will proceed with detailed due diligence and related schedules." This means that since the competitive bidding for DSME acquisition began on the 27th of last month, no companies other than Hanwha have expressed interest in acquisition.

Previously, on the 26th of last month, DSME signed a conditional investment agreement (MOU) with Hanwha Group, under which Hanwha would participate in a paid-in capital increase worth 2 trillion KRW to acquire a 49.3% stake in management rights. At the time of signing the agreement, DSME decided to conduct a so-called 'stalking horse' competitive bidding process to provide investment participation opportunities to investors offering more favorable terms than Hanwha Group.

The stalking horse method involves signing a conditional investment contract with a prospective acquirer followed by a public bidding process. However, as no potential candidates emerged, Hanwha will be able to participate in DSME's paid-in capital increase at the originally agreed 2 trillion KRW.