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$1.4 billion! A “new financial owner” has arrived! Is this shipbuilding giant ushering in a new lease of life?

sofreight.com sofreight.com 2024-05-13 14:42:09

Sunny Worldwide LogisticsIt is a logistics company with more than 20 years of transportation experience, specializing in markets such as Europe, the United States, Canada, Australia, and Southeast Asia. It is more of a cargo owner than a cargo owner~

After several twists and turns, South Korean conglomerate Hanwha Group officially completed the acquisition of Daewoo Shipbuilding. After ushering in a new "financier", the normalization of Daewoo Shipbuilding's operations will also be accelerated, and Hanwha Group, which owns Daewoo Shipbuilding, has also completed the LNG The layout of the environmentally friendly energy industry chain is also one step closer to realizing the dream of "the world's top ten military industrial enterprises".


On December 16, Hanwha Group signed an agreement to formally acquire Daewoo Shipbuilding. On the same day, Daewoo Shipbuilding officially signed a contract with Aerospace, a subsidiary of Hanwha Group, to issue new shares equivalent to 49.3% of the company's shares. Daewoo Shipbuilding will issue 104,438,643 Daewoo Shipbuilding ordinary shares to Hanwha Group at a price of 19,150 won per share through a third-party allocation of paid capital increase. According to the contract signed that day, Hanwha Group will purchase approximately 2 trillion won (approximately US.406 billion) of shares in Daewoo Shipbuilding, becoming its largest shareholder.


According to relevant sources in the Korean industry, since the Korea Development Bank (KBD), Daewoo Shipbuilding’s largest shareholder, and Hanwha Group signed a conditional investment agreement (MOU) including a 2 trillion won paid capital increase plan on September 26, Hanwha Group has completed the The process of acquiring Daewoo Shipbuilding began with detailed on-site investigation and price negotiation for Daewoo Shipbuilding separately from October 18. After a detailed on-site investigation, Hanwha Group’s acquisition team stated that it found no special issues such as incidental debt that might cause the acquisition negotiations to fail, and therefore submitted the results to the group for final discussions based on the on-site investigation results.


An official from Daewoo Shipbuilding said: "By signing a formal share sale contract this time, the company will improve its financial structure, ensure liquidity, and promote early normalization of operations. At the same time, based on this, Hanwha Group will strengthen and expand its ties with the global defense industry, environmental protection Synergies in the energy sector.”


However, although a formal acquisition contract has been signed, actual implementation still requires approval from the Korean government and business merger review by the relevant national antitrust regulators. It is reported that eight countries including South Korea, the European Union (EU), Japan, China, Singapore, Turkey, Vietnam, and the United Kingdom will perform review procedures for this business merger.


In addition, the South Korean government stated on December 16 that Choo Kyung-ho, the deputy prime minister in charge of the economy and minister of strategy and finance, presided over a meeting of ministers related to strengthening industrial competitiveness that day and approved a proposal for Daewoo Shipbuilding and Hanwha Group to sign a formal acquisition contract. This meeting is a follow-up meeting to discuss Daewoo Shipbuilding’s normalization strategic plan on September 26 this year.


A source from the South Korean government said: "After the relevant formal contract is signed that day, the relevant parties will quickly advance the follow-up measures such as business merger review by domestic and foreign antitrust regulators and approval of the purchase and sale of military industry enterprises required for the actual merger process."


Although Daewoo Shipbuilding has continued to receive a large number of new ship orders since last year, all parties have reached a consensus that the company cannot survive under the "state-owned enterprise" system managed by the Korea Development Bank's creditors. It has been observed that if the privatization of Daewoo Shipbuilding is delayed, the Korean industry will already have a sense of crisis that the domestic shipbuilding industry will collapse due to the "bloody" low-price competition among South Korea's three major shipbuilding companies.


Based on this consideration, the new South Korean government accelerated the sale of Daewoo Shipbuilding after taking office in May this year. Relevant people in the Korean shipbuilding industry said that Hanwha Group has developed rapidly in the defense industry in recent years, and it is expected to create synergy with Daewoo Shipbuilding and Defense Industry after the acquisition. At the same time, as global energy is transitioning to the hydrogen energy era, Hanwha Group will also create synergy with Daewoo Shipbuilding in the LNG field. Currently, Hanwha Group already has a business structure in which it imports LNG from the United States and generates electricity through Tongyeong Eco Power Company. Hanwha Group expects that if combined with Daewoo Shipbuilding and Marine Engineering’s offshore oil and gas production technologies such as floating liquefied natural gas units (FLNG) and LNG floating storage and regasification units (LNG-FSRU), Hanwha Group will be able to compete in the surge in demand for LNG in the future. The market covers all areas of the industrial chain.


A Korean industry insider said: "Daewoo Shipbuilding's LNG transportation technology and the strength of Hanwha Group's Hanwha Solutions and other subsidiaries can build an LNG business value chain that connects production-transportation-power generation. In addition, Daewoo Shipbuilding can take advantage of competitive advantages With the powerful offshore wind installation vessel (WTIV), Hanwha Solutions can enter the United States and Europe, and Hanwha Construction can enter the domestic offshore wind power market.”


Through this promotion of Hanwha Group's acquisition of Daewoo Shipbuilding, the normalization of operations of Daewoo Shipbuilding, which has been under the management of a creditor group for 23 consecutive years since the disintegration of Daewoo Group in 2000 and has been wronged as a company without an owner, will also be accelerated. Based on Hanwha Group's comprehensive investment support, Daewoo Shipbuilding will also increase flexibility in its environmentally friendly ship technology development and look forward to participating more actively in the competition for global orders.