News / Dongwon reportedly looking at new takeover bid for HMM

South Korean fishing conglomerate Dongwon Group is interested in bidding for HMM again, after losing out to Harim Group in 2023.

Dongwon is reportedly planning to offer KRW10trn ($6.8bn) for HMM, and is considering a consortium with compatriot shipbuilder HD Hyundai Heavy Industries or Hanwha Ocean.

Dongwon chairman Kim Jae-chul is said to be eyeing synergies with the group’s container terminals in Busan. However, sources at HD-HHI and Hanwha told The Loadstar the shipbuilders were not keen to get involved in the shipping business.

HMM came under the South Korean state’s control in mid-2016, after policy lender Korea Development Bank (KDB) exchanged its debts for equity to save the company. Ship finance institution Korea Ocean Business Corporation (KOBC) came on board as HMM’s second-largest shareholder; they have combined stake of around 71%.

The HD-HHI source disclosed that when KDB and KOBC announced plans to sell their HMM stake in HMM in 2023, it had been approached to buy the company, but declined.

The source explained: “Shipping is a cyclical industry, and we’re not familiar with the business. We’d rather acquire another shipbuilder to enlarge our production scale.”

A source at Dongwon told The Loadstar the management was exploring the feasibility of a new HMM bid, but denied local media reports that a task force had been formed to submit it.

In December 2023, Dongwon’s KRW6.2trn ($4.79bn) was outbid by Harim (the majority owner of bulk carrier operator Pan Ocean), but in February last year, the deal fell through after failing to agree payment and management terms with the major shareholders.

South Korea’s largest steel maker, Posco, had expressed interest in HMM, prompting objections from the Korea Shipowners’ Association, but has made no further statements about its interest, and it is not known if HMM will be on offer again.

South Korea’s recently elected president, Lee Jae-myung, is pushing to relocate HMM and the Ministry of Oceans and Fisheries to Busan to bolster the city’s port hub status, and the government could be inclined to retain control over the carrier.