Korea Shipowners’ Association urges Posco to drop HMM bid
THE KOREA Shipowners’ Association has formally requested that South Korea’s largest steelmaker, Posco Group, withdraw its consideration to acquire HMM.
In an official statement, KSA announced it had sent a letter to Posco chief executive Chang In-hwa, urging the group to fully retract its interest in South Korea’s largest shipping company.
“If Posco takes over HMM, the entire South Korean shipping industry could face instability depending on the company’s condition,” the association stated.
KSA analysed the situation, stating that the global shipping industry is increasingly dominated by a few key carriers, while leading maritime nations such as the US, China and Japan are nurturing their own maritime companies.
“In this context, it is time to strengthen the professionalism and competitiveness of the maritime industry.
“If Posco, a company primarily focused on the steel industry, acquires HMM, managing the shipping business professionally may become even more challenging. There is also a risk that the entire country’s maritime industry could face difficulties if the company’s business deteriorates.”
The association also stated that Posco lacks the necessary expertise in the maritime industry, pointing out that the group had previously attempted to enter the sector but ultimately failed.
“Posco once established Keoyang Shipping but eventually sold it to Hanjin Shipping after failing to overcome limitations as an in-house cargo transport firm.”
“The acquisition of HMM could similarly result in failure,” KSA warned.
Lastly, the association also requested that Posco implement the 2022 MOU between KSA and Posco Flow, the group’s logistics provider, which included a commitment not to enter the shipping industry.
KSA conclude there is a dominant view in the shipping industry and academia that Korea Ocean Business should be the major shareholder of HMM, rather than a specific company.
HMM’s largest current shareholders are the state-owned Korea Development Bank and KOBC, which hold stakes of 32.6% and 32.28% respectively.
In September, Posco confirmed in a stock exchange filing that it is reviewing a potential acquisition of the HMM, as part of its search for new growth drivers, but had not made a decision on whether to proceed with the takeover.
When contacted by Lloyd’s List for comments on KSA’s move, the company responded in writing.
“We are exploring diverse ways to drive future development and growth, which will be added to our core businesses focusing on steel and secondary batteries,” said Posco.
“We are currently considering whether it offers growth potential and strategic synergy with the group's existing businesses.”
NH Investment & Securities analyst Jeong Yeon-seung told Lloyd’s List that while Posco is said to be exploring the acquisition of HMM for business diversification, the “strategic synergies between the two remain uncertain.”
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