The newly created company will be known as Hanwha OCEAN.
Naval News reported last year that South Korea’s Hanwha Group, one of the nation’s biggest companies specializing in defense supplies would acquire DSME to further expand their business portfolio to shipbuilding industries. The new name of the company, Hanwha OCEAN implies the group’s urge to grow the company’s share in the shipbuilding and maritime engineering sectors.
Before the acquisition, formal approvals from the fair-trade commissions in different countries were needed, namely including European Union, Japan, China, Türkiye, Vietnam, Singapore and the United Kingdom. However, the process went on rather quickly with all having approved the acquisition by late March.
South Korea’s FTC has sent a formal inquiry to DAPA (Defense Acquisition Program Administration) suggesting that this acquisition might cause a monopoly in South Korea’s shipbuilding sector, but DAPA ruled out such possibilities mentioning that this merger has nothing to do with the monopoly in the nation’s shipbuilding industry.
“Acquisition of DSME gives us huge responsibility to boost one of the nation’s leading industries, as well as finding a way to contribute to the local community and the growth of South Korea’s economy.”
Mr. Kim Seung-Youn, Chairman of Hanwha Group
As Hanwha OCEAN becomes another major player in South Korea’s shipbuilding business, it is expected to cause yet another competition in South Korea’s shipbuilding sectors, as it needs to remain competitive with its rivals, namely HHI (Hyundai Heavy Industries) and HJ Shipbuilding & Construction Co, Ltd. (Formerly Hanjin Heavy Industries).
It is hoped that this merger will increase the exports of maritime vessels to foreign countries, as well as improve the financial stability of the former DSME. Although DSME was one of the largest shipbuilders in the country, it has constantly suffered from financial losses and managemental crisis for the past two decades. However, with Hanwha’s acquisition, the business prospects of Hanwha OCEAN remain rather optimistic.
Hanwha Group is expected to focus on PMI (Post-Merger Integration) works as soon as the acquisition is completed. With the acquisition of DSME, a group-level efforts will be made to create synergy in the defense industry that the group had been specializing in for the last few decades, as recently as the ISM (Integrated Sensor Mast) on Chungnam-class frigates.
One of the first trade show appearance of the newly created company will be MADEX 2023 held in early June in Busan.
