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
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 global influence in
global shipbuilding, most recently with a failed bid to acquire Australian
shipbuilding group Austal.