Daewoo Shipbuilding Welcomes New Owner After 21 Years... Hanwha Signs Final Acquisition Contract Today

Workers are busily moving at Daewoo Shipbuilding & Marine Engineering Okpo Shipyard in Aju-dong, Geoje-si, Gyeongnam. [Image source=Yonhap News]

[Asia Economy Reporter Jeong Dong-hoon] Daewoo Shipbuilding & Marine Engineering (DSME) is welcoming a 'new owner,' Hanwha Group, for the first time in 21 years since graduating from workout (financial restructuring) in 2001.

Hanwha Group and DSME are scheduled to sign the main contract (new share subscription agreement) for the acquisition and sale of DSME on the 16th.

On the morning of the same day, the government is expected to hold the Ministerial Meeting on Industrial Competitiveness Enhancement (San-gyeong-jang Meeting), chaired by Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho, to discuss Hanwha Group's acquisition of DSME shares owned by the Korea Development Bank. If the government gives final approval at this meeting, Hanwha Group and the Korea Development Bank can sign the main contract.

Hanwha Group will acquire new shares of DSME to secure management rights. The paid-in capital increase worth around 2 trillion KRW will involve six Hanwha affiliates: Hanwha Aerospace (1 trillion KRW), Hanwha Systems (500 billion KRW), Hanwha Impact Partners (400 billion KRW), and three subsidiaries of Hanwha Energy (100 billion KRW).

Seung-yeon Kim, Chairman of Hanwha Group

Earlier, on September 26 of this year, Hanwha Group signed a conditional investment agreement (MOU) to participate in DSME's 2 trillion KRW paid-in capital increase and acquire a 49.3% stake for management rights. At the time of signing the agreement, DSME conducted a so-called 'stalking horse' competitive bidding process to give investment participation opportunities to investors offering more favorable terms than Hanwha Group, but no additional companies expressed acquisition intentions.

Accordingly, Hanwha began due diligence from mid-October. From the 16th of last month, on-site due diligence was also conducted at DSME's core production facility, the Okpo Shipyard in Geoje, Gyeongnam. It is reported that no major variables that could hinder the acquisition and sale emerged during the due diligence process.

Hanwha Group plans to seek synergy effects in the military special ship business, including submarines, through the acquisition of DSME. DSME operates not only in the commercial ship sector but also in the special ship (warship and submarine) sector. By acquiring DSME, Hanwha will secure special shipbuilding capabilities and establish an integrated land, sea, and air defense system.

The restructuring of Hanwha Group's business structure is also expected to accelerate. Hanwha Group is fostering defense as a future industry. The defense businesses, previously dispersed among three companies?Hanwha Aerospace, Hanwha Corporation, and Hanwha Defense?have been integrated into Hanwha Aerospace. Hanwha Group plans to grow Hanwha Aerospace into a 'Global Top 10 Defense Company' by 2030.

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