On September 18, the Korea Fair Trade Commission (KFTC) approved the business combination application of HD Hyundai Heavy Industries and HD Hyundai Mipo. Subsequently, after receiving approval at the shareholders’ meetings of HD Hyundai Heavy Industries and HD Hyundai Mipo on October 23, the two major shipyards will complete the merger registration on December 1, formally establishing a new surviving legal entity “HD Hyundai Heavy Industries.” HD Hyundai Mipo, with its 50-year history, will disappear from then on.
The Korea Fair Trade Commission stated that since this merger is an absorption merger between two subsidiaries under the HD Hyundai Group, and there is no change in the control structure, it does not pose a risk of restricting competition.
Regarding the review result, the Korea Fair Trade Commission explained: “Both HD Hyundai Heavy Industries and HD Hyundai Mipo are subsidiaries belonging to the HD Hyundai Group, meeting the internal business combination review standards that have no impact on competition.”
Two major shipyards in the same city merge! Target: Annual revenue from military business exceeding 50 billion yuan by 2035
Previously, on August 27, HD Korea Shipbuilding & Offshore Engineering (KSOE), HD Hyundai Heavy Industries, and HD Hyundai Mipo held respective board meetings, voting to approve the merger and reorganization proposal of HD Hyundai Heavy Industries and HD Hyundai Mipo. On August 29, HD Hyundai Heavy Industries submitted the business combination application to the Korea Fair Trade Commission.
HD Hyundai Heavy Industries stated that while promoting the Korea-US shipbuilding industry cooperation project “MASGA (Make American Shipbuilding Great Again),” it pursued this merger to secure economies of scale in the shipbuilding and military sectors.
Industry insiders in Korea indicated that through the merger and reorganization of its two major shipyards, the HD Hyundai Group intends to formally implement a “super gap” strategy in the marine and military sector.
Analysis suggests that this merger and reorganization of the two “Hyundai” shipyards is not merely a simple scale expansion but aims to maximize synergies through large-scale quantitative and qualitative improvements, secure an absolute competitive advantage in the global shipbuilding market, and significantly enhance the competitiveness of the marine and military business.
Forecasts predict that the global marine and military market will sign new contracts worth $360 billion over the next 10 years. According to the UK-based military specialty magazine “Jane’s Defence Weekly,” countries worldwide are increasing investments to strengthen their naval forces, with over 2,100 new naval vessels expected to be ordered in the next decade.
Amid this trend, after absorbing HD Hyundai Mipo, which is also located in Ulsan, Korea, HD Hyundai Heavy Industries will formulate a ten-year development plan for the military sector, targeting an annual revenue of 10 trillion won (approximately $7.16 billion, 51.2 billion yuan) from military business by 2035. Furthermore, the new “HD Hyundai Heavy Industries” plans to expand market entry opportunities and increase its share in the special vessel market, such as icebreakers, where demand is surging due to Arctic development and the opening of Arctic routes.
Korean industry insiders stated that the advantage of the new “HD Hyundai Heavy Industries” as a comprehensive legal entity lies in the combination of shipbuilding and military capabilities. HD Hyundai Heavy Industries is the company with the most shipbuilding and export achievements in Korea, possessing extensive construction experience and strong technical capabilities. Coupled with the medium-sized docks, equipment, and skilled labor force from HD Hyundai Mipo, it will establish a system capable of responding to demands for various specifications of military vessels. This will become a decisive weapon for the HD Hyundai Group to capture the rapidly growing global marine and military market.
As the shipbuilding business holding company of the HD Hyundai Group, HD Korea Shipbuilding & Offshore Engineering (KSOE) will also play a role in the merger and reorganization process of HD Hyundai Heavy Industries and HD Hyundai Mipo, accelerating technology integration speed and ensuring a super technological gap.
HD KSOE plans to concentrate the R&D and design capabilities of the two shipyards, expand the application of new technologies, reduce technical risks, while simultaneously increasing the speed of technology development to lead paradigm shifts in the global market.
The new “HD Hyundai Heavy Industries” will also accelerate its layout in overseas markets. It is reported that its investment corporation established in Singapore will be set up in December this year. It will be responsible for managing overseas production bases such as HD Hyundai Vietnam Shipbuilding, HD Hyundai Heavy Industries Philippines (HHIP), and HD Hyundai Vina (tentative name, formerly Doosan Vina). It will also be tasked with exploring opportunities for new shipyards and business cooperation in overseas projects. By leveraging competitive overseas shipyards in Vietnam and the Philippines, it aims to recover market share in the ordinary merchant ship market (like bulk carriers and tankers), which is struggling due to pressure from Chinese shipbuilders. To expand overseas business, it will simplify decision-making procedures and improve decision-making efficiency.
Korean industry insiders stated that the merger and reorganization of the two “Hyundai” shipyards is significant not only for the Korean shipbuilding industry but also for the global shipbuilding market. Given that China and Japan have already achieved large-scale shipbuilding groups through domestic shipyard mergers and reorganizations, the Korean shipbuilding industry’s promotion of a merger model centered on military business ensures differentiation from competing countries.
An official from HD KSOE stated: “This merger and reorganization of the two major shipyards is the result of strategic consideration aimed at ‘a broader market’ and ‘stronger shipbuilding.’ Through the establishment of a comprehensive legal entity, we will achieve the goals of market expansion and securing super gap technology to dominate the future shipbuilding market.”
World-leading strength in building medium-sized vessels! HD Hyundai Mipo to exit the historical stage after 50 years of operation
HD Hyundai Mipo was formally established on April 28, 1975, under the name “Hyundai Mipo Shipyard” with a registered capital of 1.2 billion won. In its early days, the company primarily undertook ship repair business. It gradually shifted to shipbuilding in 1995 and began receiving new ship orders for merchant vessel construction in 1996. In February 1994, the company was renamed Hyundai Mipo Dockyard (HMD), a name it used until March 2024. After the 1997 Asian financial crisis, the company became part of the Hyundai Heavy Industries Group and was long under the control of Hyundai Samho Heavy Industries. In August 2018, by resolving complex cross-shareholding issues, it became a subsidiary of HD KSOE, the shipbuilding business holding company of the HD Hyundai Group. In March 2024, Hyundai Mipo Dockyard was renamed “HD Hyundai Mipo Co., LTD.”
HD Hyundai Mipo is a world-renowned builder of medium-sized vessels. Since 2003, a total of 15 ship types built by the company have been selected for Korea’s “World Class Product” list, including medium-sized /product tankers, medium-sized container ships, medium-sized LPG carriers, medium-sized liquefied ethylene (LEG) carriers, medium-sized LNG carriers, car carriers, asphalt carriers, juice carriers, methanol and LNG dual-fuel bulk carriers, and /roll-off (ro-ro) ships. Its strength in the medium-sized vessel construction field is firmly among the world’s best.
It is worth mentioning that in 1996, HD Hyundai Mipo established Hyundai Vietnam Shipbuilding (HVS) as a joint venture with Vietnam Shipbuilding Industry Group (Vinashin). HVS was converted into a shipbuilding subsidiary of HD Hyundai Mipo in 2011. Starting with ship repair and conversion business, Hyundai Vietnam Shipbuilding began its transition to a full shipbuilding enterprise after receiving its first order for a 56,000 DWT bulk carrier in 2008. For a long time, it primarily built bulk carriers. With improvements in construction capabilities, it has now shifted to mainly receiving orders for MR-type tankers and LR2-type tankers. Since entering the newbuilding market in 2008, Hyundai Vietnam Shipbuilding has cumulatively received orders for over 200 new ships, becoming the largest shipyard in Southeast Asia. Currently, the shipyard covers an area of over 992,000 square meters, possesses one 400,000 DWT-class dock and one 100,000 DWT-class dock, along with 1.4 kilometers of shoreline, and employs about 5,000 local Vietnamese workers.
