The companies HD Hyundai Heavy Industries (HHI) and HD Hyundai Mipo (Hyundai Mipo) have merged to form a larger group and will operate under the name HHI in future. The family-owned company wants to support US President Trump’s ambitions to revitalize US shipbuilding.
The merger was carried out by exchanging 0.4 HHI shares for one Hyundai Mipo share. After the merger, which is expected to be completed in December, HHI will be the remaining entity. HD Hyundai Samho, the remaining shipbuilding company of the group, will not be included in the merger.
HD Korea Shipbuilding & Offshore Engineering (KSOE), the holding company of HD Hyundai‘s shipbuilding division, said: “The restructuring is an attempt to expand the market while maximizing synergies.”
HHI builds large commercial vessels and specialty vessels such as floaters and drillships, while Hyundai Mipo builds small and medium-sized vessels. Both shipbuilders are located close to each other in the Korean port city of Ulsan. KSOE explained that the merger would combine competencies in the area of large and medium-sized ships, so that a comprehensive expansion of capacity and markets can be expected.
$150 billion for US shipbuilding
To coincide with the announcement of the merger, HHI announced the launch of a $150 billion fund backed by the Korea Development Bank and US private equity group Cerberus Capital Management to invest in US shipbuilding projects, including the acquisition of a US shipyard.
By increasing the size of the company, HHI will be better able to fulfill orders for defense and naval vessels. President Trump had stated that the US would like to commission its allies, namely South Korea and Japan, to build such ships for its defense.
South Korean President Lee Jae-myung had pledged support for the US shipbuilding industry after his summit with President Trump on August 25 and used this as leverage in the negotiations to lower US tariffs on his country’s exports. The tariffs were lowered from 25% to 15%, although the US Court of Appeals recently ruled that the tariffs were illegal. President Trump announced that he would take the matter to the US Supreme Court.
KSOE continued, “Following the South Korea-U.S. summit, the MAGSA (Make American Shipbuilding Great Again) project is about to enter full operation. As both countries continue to strengthen their naval capabilities, the demand for South Korean defense ships is expected to increase further.”
HHI has set a goal of achieving $7 billion in annual sales in the defense industry by 2035.
