Report: Korean Steel Giant POSCO is Exploring Acquiring Control of HMM
Speculation is being renewed over the ownership fate of Korean shipping company HMM, a year and a half after the deal to sell the company collapsed. In an exclusive report, The Korean Economic Daily writes that steel giant POSCO is drawing up detailed plans to buy control of the shipping company.
The Korean Economic Daily reports that POSCO, which had previously been speculated as a potential suitor, has changed its strategy and now is interested in re-entering the shipping sector after deciding not to participate in the government auction in 2023 for control of HMM. POSCO was invested in Hanjin but sold the company in 1995. It reports that POSCO is searching for new growth strategies as it is facing a slowdown and the impact of U.S. tariffs on its steel business and batteries.
A controlling stake in HMM has been held by two Korean banks, the Korea Development Bank and the Korea Ocean Business Corporation, since the 2016 government-led rescue of Hyundai Merchant Marine. The two government entities collectively hold over 70 percent of stock in HMM, but have been talking of privatizing the shipping company to redeploy taxpayer monies to other investments to grow Korean business.
KDB, which owns an approximately 36 percent stake in HMM, is believed to be the leader in the privatization effort. The banks selected Harim as the preferred bidder last time, but the negotiations reportedly broke down in 2024 over a demand that the banks retain a say in the management of the HMM after the privatization. KDB is believed to be exploring starting a new round of bidding.
The Korean Economic Daily reports POSCO’s strategy is targeting acquiring the shares from KDB in a private deal. KOBC, which also holds approximately 36 percent, is believed to have decided to continue to hold its position, and the strategy calls for co-managing HMM between POSCO and KOBC.
Korean law requires that if the HMM is to be sold, it must be in a public auction. The newspaper reports that HD Hyundai Heavy Industries and Hanjin might be bidders if there were a new auction. Harim is also believed to still be interested in the business. The POSCO strategy, however, could avoid a public auction.
HMM has reported that it is pursuing a strategy to diversify its business, which is currently larger in container shipping. It attempted to buy SK Shipping to expand its dry bulk shipping. It is now reported to be pursuing individual vessel purchases of bulkers and tankers as well as building new containerships. It is also ordered car carriers, which will be operated under charter to Hyundai-Glovis, and four multi-purpose cargo vessels.
Hanwha Sells $1B Worth of Stock in Hanwha Ocean to Fund U.S. Projects
A holding company in South Korea's Hanwha Group has sold about $1 billion worth of shares in shipbuilder Hanwha Ocean, and it plans to reinvest the proceeds in its new U.S. projects.
Hanwha Impact Partners has sold its entire remaining stake in Hanwha Ocean - about 13 million shares, equal to about four percent of the company - to institutional buyers in a block sale. The holding company started out with a nine percent stake in 2023, the year Hanwha bought the shipbuilder, according to Yonhap. Hanwha Group retains 42 percent of Hanwha Ocean, along with management rights.
The share sale is well-timed: Hanwha Ocean's stock has risen by 250 percent since last year. Hanwha Ocean share prices fell by five percent after the announcement Thursday.
Hanwha owns Hanwha Philly Shipyard, formerly held by Norwegian conglomerate Aker, and it has pledged to spend $5 billion on enlarging the American yard's capacity, taking it from one ship delivery per year today to 20 ships per year by the 2030s. Philly's yard - valued at $100 million at the time of its sale last year - will be upgraded with improved basic infrastructure, as well as South Korean innovations like robotic welding technology. This is one of the first major commitments under the $150 billion program that South Korea's government calls "Make American Shipbuilding Great Again," or MASGA.
Hanwha is also buying two LNG carriers that will be built jointly in Korea and the U.S., then flagged into the United States registry. The project will be an opportunity to transfer Korean LNG shipbuilding techniques and technology to Philly, Hanwha says. In addition, it has ordered a series of 10 MR chemical tankers from Philly, which it says is the biggest commercial order by value ever placed at an American yard.
Hanwha Group said that the share sale will help fund these initiatives, and a company official also told Yonhap that "the goal is also to improve the financial structure by repaying debt."
After Six Years, CSSC Completes its Megamerger With CSIC
After years of preparation, the megamerger of Chinese shipbuilding giants CSSC and CSIC has finally been completed. Though the two enterprises have both been under CSSC's control since 2019, they retained their independent stock listings - until Thursday, when an exchange filing completed the integration of CSIC into CSSC.
At the market close on Thursday, CSIC shareholders received 0.13 shares of CSSC for every share they owned. CSIC's stock will be delisted from the Shanghai Exchange on Friday. After that point, it will be dissolved as a legal entity, and all of its assets and obligations will be assumed by CSSC. The company's hope is that it will be able to better integrate its shipyard assembly operations, improve its purchasing power, achieve as-yet-unrealized synergies from the union of the two companies, and "regulate competition within the same industry."d
As a group, CSSC and CSIC were already the world's largest shipbuilding conglomerate. Now with a unified brand, the merger confirms CSSC as the biggest shipbuilder by assets, revenue and order backlog. In 2024, CSSC-operated yards built more tonnage than the entire production of the U.S. shipbuilding industry since 1945.
The merger is a reunion, and it brings CSSC back full circle to its former might. The giant state enterprise spun off CSIC as a separate entity in 1999, and gave it control of government yards in northern China. CSIC came back under CSSC's ownership in 2019, but it retained its brand, management structure and support departments. In September 2024, CSSC announced long-expected plans to re-merge the two firms fully into a single entity.
The full integration will have implications for Chinese defense procurement. CSIC handles a large share of the PLA Navy's surface fleet construction contracts, and unification with CSSC is expected to help streamline warship production.
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