HD Hyundai Co., the world’s second-largest shipbuilder, is in negotiations with J& Private Equity to buy back Hyundai Hyms Co., a ship parts manufacturer, to enhance productivity and supply chains.
Key Highlights
Acquisition Talks: Discussions began after J& Private Equity’s lockup period expired on January 26, 2025.
Hyundai Hyms’ Role: The company produces curved blocks, with 94% of its sales coming from HD Hyundai’s shipbuilding subsidiaries.
Previous Sale: HD Hyundai sold a 75% stake in Hyundai Hyms to J& Private in 2019 for 97.5 billion won ($67.2M) during its attempted takeover of Daewoo Shipbuilding, which failed in 2022.
Challenges in the Deal
Surging Valuation: Hyundai Hyms’ market capitalization has skyrocketed to 667.9 billion won, over six times its 2019 valuation.
Strong Earnings:
- Operating profit rose 53% to 16.9 billion won in the first three quarters of 2024.
- Sales increased by 24% to 166.8 billion won.
Possible Outcomes
Preferred Bidder: HD Hyundai is in a strong position to acquire Hyundai Hyms but is not obligated to do so.
Potential Third-Party Sale: If negotiations stall, Hyundai Hyms may be sold to another buyer.
With the global shipbuilding boom, Hyundai Hyms’ growing value complicates the deal, making price negotiations a critical factor in HD Hyundai’s decision.
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Source: THE KOREA ECONOMIC DAILY
