News / "Buying HMM would be a career pinnacle" Dongwon head says

Photo: Dongwon Industries

Dongwon Group’s founding honorary chairman Kim Jae-chul said yesterday that acquiring HMM would represent the pinnacle of his career.

Speaking to journalists after receiving an honorary doctorate from Hanyang University, it was the first time that Mr Kim (pictured above) publicly discussed Dongwon’s bid for HMM.

Dongwon, Pan Ocean parent Harim Group and logistics group LX International, are in the running to acquire the state’s majority interest in South Korea’s flagship box line. A preferred bidder is expected to be named by November.

Park Ki-hoon, ex-CEO of HMM competitor SM Line, which withdrew from the bid, has also been engaged by Dongwon as an advisor for the process. Dongwon, South Korea’s largest fishing company, has appointed Bain & Company as its due diligence advisor.

Mr Kim said he sees synergies between HMM and Dongwon’s container terminal operations, adding that Dongwon will develop HMM in the context of not just a business but also the entire shipping industry, such as the operation of eco-friendly ships.

After 50 years helming Dongwon, Mr Kim handed over control to his younger son, Kim Nam-jung, in 2019.

Mr Kim appeared unfazed about Dongwon’s lack of experience in commercial shipping, suggesting that the group’s fishing expertise could be transferred to HMM.

He said: “As a company that has been running its business at sea for a lifetime, Dongwon can run HMM better than anyone else.”

Mr Kim Nam-jung, who was present at the ceremony, told journalists that acquiring HMM will mark further progress for Dongwon, which runs a few container and multi-purpose terminals in Busan port, including a new facility in Busan New Port’s West Container Terminal that will open in early 2024.

He said: “I don’t see (the acquisition of HMM) as a competition with Harim or LX. I think Dongwon is ready for further development. If we take over HMM, we will develop the company with our strengths in eco-friendly vessels and port operations.

“We’re thinking about how we can support HMM to not only be a competitive company, but also to develop the industry.”

Mr Kim Nam-jung downplayed speculation that Dongwon would seek the help of financial services group Korea Investment Holdings, headed by his older brother Nam-goo, to raise funds, according to South Korean media reports. He said: “Neither my father nor my brother have discussed support for the acquisition price.”

South Korean media reports also suggested that Dongwon could issue bonds or sell stakes in its other affiliates to accumulate the war chest.

The HMM shares held by KDB and KOBC, potentially amounting to a 57.87% stake, are estimated to cost between $3.8bn and $7.6bn.