Hanwha Aerospace to spin off non-core units for defense sector

Hanwha Aerospace to spin off Hanwha Precision Machinery, Hanwha Vision to place them under a new holding company

Prototype of Hanwha Aerospace’s advanced aero engine (File photo by Hanwha Aerospace)
Prototype of Hanwha Aerospace’s advanced aero engine (File photo by Hanwha Aerospace)
Hyung-Kyu Kim 1
2024-08-14 17:24:14 khk@hankyung.com
Corporate restructuring

Hanwha Aerospace Co., South Korea’s answer to Elon Musk’s SpaceX, has decided to separate its non-core units to concentrate on the defense and aerospace businesses – key growth drivers of the chemical-to-defense conglomerate Hanwha Group.

Hanwha Aerospace said on Wednesday its shareholders approved its plan to spin off its semiconductor equipment-making unit Hanwha Precision Machinery Co. and security system affiliate Hanwha Vision Co.

Hanwha Aerospace also plans to establish a new holding company dubbed Hanwha Industrial Solutions, which will have 100% stakes in the separated units.

Hanwha Corp., the group’s existing holding company, is set to hold a 33.95% stake in Hanwha Industrial Solutions.

Hanwha Aerospace, the aircraft engine-making unit of Hanwha Group, unveiled the spin-off plan in April.

DEFENSE TROIKA

The spin-off allowed the group to accelerate its defense business led by three units – Hanwha Aerospace, Hanwha Ocean Co. and Hanwha Systems Co.

“We aim to become a global top-tier defense maker and lead the aerospace and new mobility industries,” said Hanwha Aerospace CEO Son Jae-il.

Hanwha Aerospace merged Hanwha Defense Co. in November 2022 and Hanwha Corp.’s defense division in April 2023 to promote synergy and cut costs.

The group also acquired Daewoo Shipbuilding & Marine Engineering Co. (DSME), which manufactures submarines for the South Korean Navy, in May 2023 and established Hanwha Ocean to expand its defense business into the maritime defense sector.

Write to Hyung-Kyu Kim at khk@hankyung.com
 
Jongwoo Cheon edited this article.
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