The merger of HD Hyundai Heavy Industries and HD Hyundai Mipo, two major shipyards under HD Hyundai, South Korea’s largest shipbuilding group, has made substantial progress. This marks HD Hyundai’s first major restructuring since establishing HD Korea Shipbuilding & Offshore Engineering (HD KSOE), an intermediate holding company for its shipbuilding business.
On September 18, South Korea’s Fair Trade Commission (KFTC) issued an announcement stating that it has approved the corporate merger plan between HD Hyundai Heavy Industries and HD Hyundai Mipo. Each company plans to hold an extraordinary general meeting of shareholders on October 23 to review the merger proposal, with the effective date of the merger set for December 1st.
The merger will be completed by the surviving company, HD Hyundai Heavy Industries, issuing new shares to HD Hyundai Mipo shareholders. Based on the merger ratio, HD Hyundai Mipo will receive 0.4059146 HD Hyundai Heavy Industries common shares for every one HD Hyundai Mipo common share.
Regarding its decision to approve the merger plan of the two companies, the KFTC explained: “As HD Hyundai Heavy Industries, HD Hyundai Mipo, and other companies are all affiliated entities under the HD Hyundai Group, and no change in control has occurred, it is presumed that there is no possibility of restricting competition.”
On August 27, HD KSOE, HD Hyundai Heavy Industries, and HD Hyundai Mipo each convened board meetings to approve the merger proposal for the two shipyards.
On August 29, HD Hyundai Heavy Industries submitted a corporate merger plan to the KFTC to absorb HD Hyundai Mipo in order to integrate its shipbuilding resources, expand the defense market, and comply with the “Make American Shipbuilding Great Again” initiative.
This business restructuring marks the first major organizational realignment by HD Hyundai since 2019. Previously, HD Hyundai established HD KSOE as an intermediate holding company for its shipbuilding operations to facilitate the acquisition of Hanwha Ocean (formerly Daewoo Shipbuilding & Marine Engineering, DSME), subsequently reorganizing its corporate structure accordingly. Although the DSME acquisition ultimately fell through, HD KSOE has consistently served as the “control center” for HD Hyundai’s shipbuilding business, overseeing strategic planning and investment functions.
Previously, HD KSOE—the intermediate holding company for HD Hyundai Group’s shipbuilding operations—completed its acquisition of Daewoo Shipbuilding & Marine Engineering (DSME) in 2023 and restructured its corporate framework accordingly. Although the DSME acquisition ultimately fell through, HD KSOE has consistently served as the “control center” for HD Hyundai’s shipbuilding business, overseeing strategic planning and investment functions.
Through this business restructuring, HD KSOE will integrate the operational strengths of HD Hyundai Heavy Industries and HD Hyundai Mipo, ensuring global market competitiveness while further expanding its defense business portfolio.
To achieve integrated management, HD KSOE will jointly establish an investment entity with HD Hyundai Heavy Industries, the surviving company, in Singapore to oversee overseas shipbuilding operations. This entity will serve as a hub for coordinating overseas business and plans to expand its commercial ship market share by leveraging competitive overseas shipyards in the future.
It is worth mentioning that this business restructuring was strongly opposed by the unions of the two companies. With the emergence of new contradictions such as possible job redeployment issues after the merger and the expected profit distribution issues after the establishment of the Singapore legal person, coupled with the previous deadlock in salary negotiations, the two unions launched fierce strike protests.
The strike protest was finally resolved when HD Hyundai Heavy Industries’ labor and management reached another provisional agreement on September 17. Regarding the merger, both sides decided in the second provisional agreement to sign an employment stability agreement in support of the merger process between HD Hyundai Heavy Industries and HD Hyundai Mipo.
Notably, both HD Hyundai Heavy Industries and HD Hyundai Mipo rank among South Korea’s top shipbuilders. When measured by order backlog for individual shipyards (excluding shipbuilding groups), they occupy the 1st and 15th positions globally.
At the time of announcing the merger, a representative from HD KSOE stated: “This business combination is a strategic move based on the goals of ‘opening up a broader market’ and ‘building a stronger shipbuilding industry’.” They also emphasized that “through the integration of the companies, we will achieve market expansion and advanced technological reserves, leading the development of the future shipbuilding market.”