HD Korea Shipbuilding & Offshore Engineering (HD KSOE), the intermediate holding company of HD Hyundaiโs shipbuilding division, has announced a sweeping restructuring of its business ahead of the launch of the U.S.โKorea shipbuilding cooperation project known as MASGA (Make American Shipbuilding Great Again).
On August 27, the boards of HD Hyundai Heavy Industries (HHI) and HD Hyundai Mipo Dockyard (HMD) approved a merger plan under which HHI will remain as the surviving entity. Shareholders of HMD will be allocated new HHI shares at a ratio of 0.4059146 HHI shares for each HMD common share. Following shareholder meetings and antitrust reviews, the two companies are scheduled to be officially integrated as the new HD Hyundai Heavy Industries in December 2025.
HD KSOE described the restructuring as a strategic move to achieve both quantitative and qualitative scale, maximize synergies, and secure a commanding lead in the global market through proactive development of cutting-edge technologies. The restructuring also follows trends in competing nations: both China and Japan have completed mergers of their largest shipbuilders in recent years to strengthen competitiveness.
The merger combines the strengths of HHI, the worldโs largest shipbuilder with extensive expertise in large-scale vessels and advanced naval defense technologies, and HMD, a leading mid-sized shipbuilder with specialized docks, facilities, and a skilled workforce well-suited for naval ship construction.
The unified entity is expected to broaden its market reach, accelerate its entry into the fast-growing naval defense sector, and enhance overall competitiveness. HHI already holds the largest track record for naval ship construction and exports in South Korea, while HMDโs infrastructure provides the scale and flexibility needed to capture new contracts.
The restructuring comes as demand for Korean defense exports is expected to grow, bolstered by the MASGA project and heightened global interest in strengthening naval capabilities. The integration is positioned to significantly strengthen HD Hyundaiโs role in the defense shipbuilding market, which is expanding in line with global naval modernization programs. The company has set an ambitious target of achieving โฉ10 trillion (approx. $7.4 billion) in annual defense sales by 2035.
In addition, the combined shipbuilder plans to expand its presence in special-purpose vessels such as icebreakers, where demand is rising with Arctic development, and to capture new opportunities in the eco-friendly ship segment.
By consolidating R&D and design resources, the company expects to apply new green technologies across both medium and large vessels, while lowering development risks, cutting costs, and accelerating time-to-market in response to tightening environmental regulations.
To strengthen its global reach, HD KSOE will also establish an overseas investment corporation in Singapore this December in partnership with the integrated HHI.
The new entity will manage existing overseas yards, including HD Hyundai Vietnam Shipbuilding, HD Hyundai Heavy Industries Philippines, and the provisionally named HD Hyundai Vina, while also scouting new yards and partnerships. The Singapore hub will streamline decision-making, improve competitiveness in the merchant ship segment where Chinese yards dominate, and spearhead HD Hyundaiโs international growth strategy.
“This business reorganization reflects our strategic commitment to pursue a โbroader marketโ and โstronger shipbuilding.โ With the launch of the integrated HD Hyundai Heavy Industries, we will expand our global footprint, secure technological leadership, and position ourselves at the forefront of the future shipbuilding industry.”
HD KSOE spokesperson
