The merger of two leading South Korean shipyards, HD Hyundai Heavy Industries and HD Hyundai Mipo, has been approved, and the combined entity will be established as scheduled. HD Hyundai Heavy Industries excels in large-scale shipbuilding, while HD Hyundai Mipo specializes in small and medium-sized vessels. The merger will enhance the flexibility of shipyard operations and strengthen global competitiveness across various sectors, including commercial vessels and specialized ships.
On October 23rd, HD Hyundai Heavy Industries and HD Hyundai Mipo held separate extraordinary general meetings in Ulsan, where they approved the merger resolutions with approval rates of 98.54% and 87.56% of shareholders present, respectively. This extraordinary general meeting effectively completes the merger process between the two companies. The merger, which was approved by the Korea Fair Trade Commission on September 18th, is scheduled to be established in December.
This merger aims to enhance the operational efficiency and global competitiveness of HD Hyundai’s shipbuilding business. It plans to integrate the facilities, personnel, and R&D resources of HD Hyundai Heavy Industries and HD Hyundai Mipo to optimize production efficiency and cost structure.
Specifically, HD Hyundai Heavy Industries plans to convert two of the four existing dry docks at HD Hyundai Mipo into specialized facilities for building specialized ships. By integrating the shipbuilding technology originally held by HD Hyundai Heavy Industries with the dock facilities and personnel resources at HD Hyundai Mipo suited for shipbuilding, this initiative will not only address HD Hyundai Mipo’s limited experience in constructing specialized ships but also enhance HD Hyundai Heavy Industries’ overall shipbuilding capabilities.
The newly merged company has reportedly set medium- and long-term goals, aiming to achieve 37 trillion won in operating revenue by 2035, nearly tripling from 19 trillion won in 2024. The defense market is targeted to reach 10 trillion won, ten times the current annual average of 1 trillion won. A British military magazine predicts that the global market for new ship orders will reach over 2,100 ships over the next decade, with a total value of US$360 billion (approximately 516 trillion won).
In the merchant shipping sector, HD Hyundai Heavy Industries and HD Hyundai Mipo are leveraging their merger to accelerate the competitiveness of their general merchant shipping businesses. The two shipbuilders will strengthen their R&D capabilities to develop new technologies and expand their application from medium-sized ships to larger ships. At the same time, overlapping R&D projects between the two shipbuilders will be reduced, which is expected to lower technology development costs and risks.
This integration will also accelerate the overseas expansion of both shipbuilders. The newly merged entity will establish a new legal entity in Singapore with HD Korea Shipbuilding & Offshore Engineering (HD KSOE), the intermediate holding company for HD Hyundai’s shipbuilding operations, to coordinate business activities across Asia.
It is worth mentioning that Korean media reported that in view of the high-level personnel changes at HD Hyundai a few days ago, the name of the integrated new company may be changed in the future, and large-scale organizational structure adjustments are expected to be implemented simultaneously.
On October 17, HD Hyundai announced the appointment of Chung Kisun, a 43-year-old third-generation member of the founding family born in 1982, as Group Chairman (President). Outgoing Chairman Kwon Oh-gap will assume the role of Honorary Chairman. President Lee Sang-kyun and Vice President Kim Seok-ho were promoted to Vice Chairman and President, respectively. Both have been designated as co-CEOs of the merged company.
Regarding rumors of a name change, an HD Hyundai official stated: “The company name change has not yet been finalized,” but added that “given the recent executive reshuffle, corresponding changes within the organization are expected to follow.”
Additionally, the South Korean industry widely believes that with Chairman Chung Kisun taking office and the newly integrated company set to launch soon, HD Hyundai’s overseas shipbuilding investment plans will be fully activated.
An official from Hyundai Heavy Industries stated, “The necessity and strategic value of this integration have been recognized by shareholders”, emphasizing that “the combined strengths and technical expertise of both companies will continue to lead the future shipbuilding market”.