Hanwha Group now owns a 49.3% controlling stake in the shipbuilder. The KDB, which had been DSME’s largest shareholder prior to the deal, said that the group’s acquisition of the company was likely to significantly improve the latter’s finances.
“Several structural changes to DSME’s finances will be made through this acquisition, laying the groundwork for the normalization of the company’s operations.”
KDB
A total of six Hanwha Group subsidiaries have acquired a stake in DSME, including Hanwha Aerospace with 1 trillion Korean won (around $ 761 million) , Hanwha System with 500 billion Korean won (around $ 381 million), and Hanwha Impact with 400 billion Korean won ($ 305 million).
The group’s acquisition of DSME led by Hanwha Aerospace is the final element in a major reorganization of the conglomerate’s corporate structure which began earlier this year. Hanwha Defense recently merged with Hanwha Aerospace, while the defense production department of Hanwha, the holding company of Hanwha Group, was also transferred to Hanwha Aerospace. This means that most of the conglomerate’s defense-related companies and departments are now controlled by Hanwha Aerospace, streamlining defense-related business operations significantly.
“We will create Korea’s Lockheed Martin…Our goal is to become a top 10 defense company in the global market by 2030.”
Hanwha Aerospace
It is hoped that Hanwha Group’s global operations network will help DSME increase exports. Even though the latter is one of South Korea’s largest shipbuilders, it has been racked by uncertainty and financial losses for the past two decades. Most recently, the company is facing anothersetback with Indonesia’s stalled submarine acquisition, despite DSME’s chief executive officer stating that he was cautiously optimistic about the program’s prospects in November.
In addition to this, closer cooperation between Hanwha System, one of the primary suppliers of combat systems and sensors for South Korean-built warships, and DSME is expected to have several positive effects, including reduction of cost.
The merger still needs to be approved by South Korea’s Fair Trade Commission and similar bodies in the European Union, Japan, China, Türkiye, Singapore, Vietnam, and the United Kingdom before it can be confirmed. This process is expected to take at least 3 months.
