Shipping Industry Network news, according to local media reports, the Korea Shipowners’ Association recently issued a statement criticizing POSCO’s plan to acquire the flagship Korean liner company HMM.
As previously reported by Shipping Industry Network, advisors from Samil PwC, the Korean member firm of PwC, and the Boston Consulting Group are collaborating with POSCO to evaluate a transaction worth approximately 70 trillion won (about $5 billion). This transaction covers the roughly 71.7% stake in HMM held by its major shareholders, the Korea Development Bank (KDB) and the Korea Ocean Business Corporation (KOBC).
Previously, companies including Hyundai Glovis, LX Pantos, SM Line, and the Dongwon Group had participated in the bidding for HMM. This time, market rumors that POSCO wants to acquire HMM instantly attracted global attention. Supporters believe that a POSCO acquisition of HMM appears very “reliable,” with strong “synergies” between the two parties.
However, the Korea Shipowners’ Association pointed out that HMM, which was rebuilt at great cost to taxpayers, might “become a mere transportation subsidiary under POSCO” instead of competing in the global container shipping market. More worryingly, if POSCO’s core steel business faces difficulties, HMM could be “sacrificed” again, thereby undermining the Korean government’s shipping industry reconstruction plan.
The Korea Shipowners’ Association highlighted three specific risks: First, the highly specialized global business of container shipping would be affected by non-specialist management; second, POSCO might primarily use HMM for its own cargo, squeezing out other Korean competitors; third, this would “destroy the foundation of the Korean shipping industry,” harming the interests of exporters.
In short, on one hand, the Korea Shipowners’ Association emphasized the importance of HMM as Korea’s flagship liner company. On the other hand, it expressed concern about a “major shipper” transforming into a “shipowner.” The Association also cited the case of Brazil’s Vale creating its own large fleet as a cautionary example.
