Harim Acquires HMM for 6.4 Trillion KRW... Selected as Preferred Negotiation Partner (Comprehensive)

KDB Industrial Bank Announcement on the 18th
Harim to Acquire 398.79 Million Shares Held by Creditors
Goal to Complete Transaction by First Half of Next Year

[Image source=Yonhap News]

Harim Group is acquiring HMM, the largest container shipping company in South Korea. On the 18th, the Korea Development Bank and the Korea Ocean Business Corporation announced that the Pan Ocean-JKL consortium was selected as the preferred bidder for the acquisition of HMM. Harim Group put forward Pan Ocean, a bulk shipping company it acquired through a merger and acquisition (M&A) in 2015, as the acquisition entity for HMM.

The number of shares for sale in HMM is 398.79 million shares (57.9% stake) held by the creditors. The acquisition price is reported to be around 6.4 trillion KRW. Last month, the Korea Development Bank and the Korea Ocean Business Corporation held the main bidding for the sale of HMM. At that time, Dongwon Group and Harim Group participated in the final bidding.

Harim Group reportedly submitted a bid of about 6.4 trillion KRW, surpassing Dongwon Group's bid by several hundred billion KRW to gain an advantage. Thanks to managing Pan Ocean, Harim also received higher scores in qualitative evaluations.

Additionally, Harim, together with JKL Partners, planned to raise 3 trillion KRW without acquisition financing through the sale of securities, issuance of perpetual bonds, and sale of vessels. This aspect also seemed to contribute positively to the qualitative evaluation.

The Korea Development Bank and the Korea Ocean Business Corporation plan to negotiate detailed contract terms and sign a Stock Purchase Agreement (SPA). The goal is to complete the transaction in the first half of next year.

The announcement of the preferred bidder was made 25 days after the main bidding began. Originally, it was expected that the Korea Development Bank and the Korea Ocean Business Corporation would select the preferred bidder by early this month, but difficulties were encountered.

The delay in the announcement compared to the original schedule was due to the handling of the remaining perpetual bonds worth 1.68 trillion KRW held by the sellers, the Korea Development Bank and the Korea Ocean Business Corporation. The Pan Ocean-JKL Partners consortium requested that the conversion of the perpetual bonds into shares be deferred for three years.

This led to opposition from Dongwon Group, sparking controversy. On the 8th, Dongwon Group sent an official letter to the Korea Development Bank and the Korea Ocean Business Corporation stating that "the request from the Pan Ocean-JKL Partners consortium violates the bidding criteria" and threatened legal action if fairness was not ensured.

Ultimately, Harim reportedly withdrew all of its requests.

Once Harim Group completes the acquisition of HMM, its assets will increase to 42.8 trillion KRW, propelling it to 13th place in the business world rankings, a leap of 14 positions at once.

Harim owns the bulk shipping company Pan Ocean. By acquiring the container shipping company HMM as well, it is poised to become a comprehensive logistics company. HMM, which was under creditor management since 2016, has found a new owner after seven years.

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