South Korean chaebol Hanwha Corporation is set to enter the shipbuilding business after being named today (26 September) as a preferred bidder to buy most of state policy lender Korea Development Bank’s (KDB) holdings in Daewoo Shipbuilding & Marine Engineering (DSME).
Founded by Kim Chong-hee, Hanwha’s business spans the defence, aerospace, construction and finance sectors; the group is South Korea’s seventh-largest conglomerate. Hanwha is expected to acquire 49.3% of DSME’s shares for US$1.39 billion, while KDB will retain a 28.2% stake.
KDB chairman Kang Seok-hoon had said earlier this month that he wants the bank to release its grip on DSME and HMM at the soonest. In DSME’s case, efforts to seek a white knight had failed over the last 25 years, after its original parent Daewoo group collapsed following the Asian financial crisis. Hopes that the country’s largest shipbuilder, Hyundai Heavy Industries, could merge with DSME, were dashed in January after the European Commission’s anti-trust unit rejected the move.
Hanwha, which backed out of an earlier attempt to buy DSME in 2008 after the global financial crisis, expects its investment in DSME to produce synergies with its defence and green energy businesses.
Martina Li
Asia Correspondent
