HMM Confirms Talks to Acquire SK Shipping Have Broken Down

HMM confirmed in a stock exchange announcement that its talks to acquire assets from SK Shipping have “finally broken down.” The company had been pursuing the acquisition as part of its strategy to diversify its non-container shipping operations.

The Korean media had reports of a wide valuation gap between HMM and the largest shareholder of SK, the private investment firm Hahn & Company. According to the reports, HMM was valuing the assets it proposed to buy at half the expected price of the investment company.

HMM initially issued a stock exchange announcement on the morning of August 4, denying the media reports that the talks had fallen apart. It said it had “not received any confirmation” of the media reports that its “status as preferred bidder for the acquisition of SK Shipping” had been revoked. The end-of-day statement, however, said that the “acquisition negotiations have finally broken down.”

HMM reported it was selected as the preferred bidder on January 15 and was negotiating to buy assets from SK. The company conducted a due diligence and an independent valuation.

One of the challenges for HMM is an existing non-compete agreement that runs till 2029, issued as part of the sale of Hyundai Merchant Marine’s LNG business in 2014. At the time of the sale, it agreed not to re-enter the sector for 15 years, although there have been previous reports that HMM was considering repurchasing the LNG business, which was sold to an investment company.

HMM is reported to have proposed buying the other segments of SK, focusing on the fleet of 37 vessels, including 23 VLCCs, as well as bulk carriers and LPG carriers. HMM has been working to grow its operations in the segments as part of a $17 billion investment plan outlined in 2024.

SK Shipping has been controlled since 2018 by Hahn and was able to make a significant turnaround in its operations, focusing on the liquid bulk segments. According to the reports, SK had grown its long-term contract business to 87 percent of operations as of the end of 2024. The company, however, has been selling tankers and gas carriers as they come off long-term charters.

Business Korea reports that Hahn & Company is expected to resume negotiations for the sale of SK Shipping. It expects it will pursue talks with multiple domestic and foreign shipping companies or investors.