According to sources, Hyundai Merchant Marine HMM is launching its privatization with a deadline for offers on August 21. The majority owners, Korea Development Bank (KDB) and Korea Ocean Business Corp (KOBC) – who interceded for his rescue in 2016 – are selling a 41% stake in the Korean shipping company. The sale is expected to be completed by the end of the year with a minimum value of KRW 5 trillion (approximately USD 3.9 billion). Potential bidders include Hyundai Motor Group, LX Group, Samsung SDS, CJ Group, POSCO, Harim Group and SM Group, owners of SM Line.
The sale coincides with a decline in HMM’s earnings. After posting gains in 2020-2022 driven by ship deliveries, operating profit fell sharply in the first quarter of 2023. Uncertainty lingers for the remainder of the year, with few positive indicators from other carriers.
A successful bid by SM Group for HMM would lead to a merger with SM Line, creating a combined fleet of 861,000 TEU. However, this would not change its position in the world ranking of the top 10 carriers. SM Line is also considering selling if its bid for HMM is unsuccessful as it seeks to increase its scale and economies of size.
SM Line was created in 2016 following the bankruptcy of Hanjin Shipping, and has experienced several years of losses before turning a profit again in 2021.
Source: Alphaliner, KED Global & Offshore Energy
