Hanwha to Acquire Philly Shipyard
South Korea's Hanwha Group has agreed to acquire U.S. shipbuilder Philly Shipyard in a $100 million cash deal, the companies announced on Thursday.
Under the deal, which is expected to close in Q4 2024, Hanwha Systems and Hanwha Ocean will purchase purchase of Philly Shipyard, Inc., the sole operating subsidy of Aker-owned Philly Shipyard ASA, based in Oslo.
Kristian Røkke, Chairman of Philly Shipyard ASA, said, “After two decades of stewardship, it is with great honor that we transition the ownership from Aker to Hanwha. Recognized as a global leader, Hanwha brings a wealth of sophisticated shipbuilding experience that will enable Philly Shipyard to realize a grander vision for its employees and customers. Reflecting on the past 17 years, I am personally grateful for the opportunity to have worked side by side with the people of Philly Shipyard and eagerly anticipate witnessing the shipyard’s continued growth and success in the future.”
Philly Shipyard, a public company, said its board of directors has approved the transaction following a review by Arctic Securities that concluding the transaction is fair from a financial perspective. The deal remains subject to customary conditions and regulatory approvals.
Philly Shipyard is one of only a few remaining U.S. shipyards capable of building Jones-Act-qualified oceangoing vessels. In recent years, it has also taken on government work, including ship repair, and most notably, construction of five National Security Multi-Mission Vessels (NSMV) ordered by the U.S. Maritime Administration (MARAD) for the state maritime academies. Its current orderbook also includes a subsea rock installation vessel (SRIV) for Great Lakes Dredge & Dock as well as a trio of 3,600 TEU containerships for Matson.
The acquisition comes as U.S. Navy Secretary Carlos Del Toro seeks the help of Korean investment and technologies to revitalize U.S. domestic commercial and naval shipbuilding capabilities amid China's aggressive pursuit of worldwide shipbuilding dominance.
Hanwha Group is the seventh-largest business group in South Korea and a Fortune Global 500 company, and its subsidiary Hanwha Ocean, previously Daewoo Shipbuilding and Marine Engineering (DSME), is one of South Korea’s “big three” shipbuilders. In recent years the conglomerate has sought to bolster its influence in global shipbuilding, most recently with a failed bid to acquire Australian shipbuilding group Austal.
“The opportunity to collaborate with Philly Shipyard, a significant shipbuilder with a storied history, is an exciting strategic opportunity that will allow Hanwha Systems to deploy its state-of-the-art naval systems and associated technologies in the U.S. market,” said Sung-Chul Eoh, CEO of Hanwha Systems.
“We look forward to leveraging our shipbuilding and manufacturing know-how in continuing the success of Philly Shipyard as it meets the expanding needs of the U.S. for decades to come,” said Hyek Woong Kwon, CEO of Hanwha Ocean.