Hanwha's Conditions for Acquiring Daewoo Shipbuilding: "All Registered Directors Must Submit Resignation Letters"

Approval from EU and 7 Other Countries Required Along with Domestic and International Licensing Procedures

[Image source=Yonhap News]

[Asia Economy Reporter Oh Hyung-gil] Hanwha Group has made the replacement of the entire board of directors, including CEO Park Doo-sun, a prerequisite for acquiring Daewoo Shipbuilding & Marine Engineering (DSME), making the management change a foregone conclusion.

On the 16th, DSME announced that it had signed a separate new share subscription agreement with Hanwha Aerospace and other Hanwha affiliates in accordance with the investment agreement dated September 26.

DSME explained, "According to the investment agreement, we designated the acquirers as conditional investors for the paid-in capital increase, and the acquirers were confirmed as the final investors through a competitive bidding process (stalking horse method) set by us."

The preconditions for the new share subscription agreement include obtaining domestic and international approvals and the submission of resignation letters from all registered directors.

Regarding domestic and international approvals, it was explained that corporate merger approvals must be obtained from eight countries, including the Korea Fair Trade Commission, the European Union (EU), Japan, China, Singapore, T?rkiye, Vietnam, and the United Kingdom.

Additionally, approval from the Minister of Trade, Industry and Energy of Korea under the Defense Business Act for the sale and purchase of defense companies, as well as foreign investment permits under the Foreign Investment Promotion Act, are also conditions.

Furthermore, the agreement includes the condition that all registered directors of DSME must submit their resignation letters. The current registered directors are CEO Park, Shipyard Director Woo Je-hyuk, Support Headquarters Director Lee Young-ho, and four outside directors (Kim Bo-won, Kim In-hyun, Song Min-seop, Choi Kyung-gyu).

There is a strong expectation that the new management will appoint Jeong In-seop, former CEO of Hanwha Energy who has overseen the acquisition due diligence, to a key position. He, who was formerly in the secretariat of former Daewoo Group Chairman Kim Woo-joong, joined Hanwha Group in 2013 and served as CEO of Hanwha Energy in 2019.

However, within DSME, there are demands to appoint a shipbuilding expert to the new management, so internal promotions or external recruitment cannot be ruled out.

Meanwhile, Hanwha Group plans to leverage the acquisition of DSME to create synergy effects in the military special ship business, including submarines. In addition to commercial ships, it operates in the special ship (warship and submarine) sector.

With the acquisition of DSME, Hanwha is expected to secure special shipbuilding capabilities and establish an integrated 'land, sea, and air system' spanning space and ground defense to maritime, laying the foundation for growth as a leading global defense company.

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