Merged entity eyes W37tr in revenue by 2035, with major expansion in defense, US markets
The newly integrated HD Hyundai Heavy Industries was launched Monday, after South Korea’s biggest shipbuilder absorbed its smaller affiliate HD Hyundai Mipo, in a move aimed at strengthening competitiveness against Chinese and Japanese rivals and expanding its US business under the $150 billion “MASGA” initiative.
HD Hyundai, the parent company of both shipbuilders, said all merger procedures between HD Hyundai Heavy Industries and HD Hyundai Mipo were finalized. The merged entity aims to achieve 37 trillion won ($25.2 billion) in revenue by 2035, further solidifying its position as the world’s leading shipbuilder, it added.
The official launch comes after the merger plan was approved by the boards of the companies in August, followed by clearance from the Fair Trade Commission in September and a shareholder vote in November. Under the terms, HD Hyundai Mipo shareholders received 0.4059146 shares of HD Hyundai Heavy Industries for each share they held.
HD Hyundai said that combining the two companies would expand and diversify their markets, maximize synergies through expanding scale and capabilities and speed up development of next-generation technologies to secure competitive edge in an increasingly fierce global shipbuilding market.
The consolidation comes as major rivals in China and Japan have recently merged their top shipbuilders to expand scale.
The unified company is expected to play bigger role in the “Make American Shipbuilding Great Again” initiative, a Korea-US cooperation project to revitalize the American shipbuilding industry through a $150 billion investment fund, in which HD Hyundai will be a key partner.
HD Hyundai added that the merged entity is expected to bolster its competitiveness in the defense industry. By combining HD Hyundai Heavy Industries’ naval shipbuilding expertise with Hyundai Mipo’s dock capacity, facilities and workforce, the company aims to secure annual sales of 10 trillion won in the defense sector by 2035.
“Today marks the beginning of a new history in Korea’s shipbuilding industry,” HD Hyundai Chair Chung Ki-sun said in a video message celebrating the launch. “With the combined technological strength and know-how of the two companies, coupled with the passion of our employees, a new innovation will begin.”
Actor Kim Woo-bin, who appears in an HD Hyundai TV commercial, also offered congratulations. In an internally broadcast message, he said he hopes the merger becomes “a leap toward a stronger shipbuilding industry and a new beginning for a greater Korea.”
The unified shipbuilder will also combine R&D and design capabilities to accelerate the development of eco-friendly and future technologies. In addition, it also seeks to increase its presence in specialized markets like icebreakers, capitalizing on rising demand linked to Arctic development.
sahn@heraldcorp.com