SM Group is ready to bid up to $3.5bn to take over compatriot liner HMM, but will walk away from any deal if the sellers ask for too much money.
HMM, which has been under state control for many years following financial hardship, is being readied for privatisation with a number of Korean entities being linked to it.
Putting his hat in the ring, Woo Oh-hyun, chairman of SM Group, which runs SM Line as well as Korea Line Corp and Korea Shipping Corp, told the Korea Economic Daily: “[SM Group] will immediately jump into the race for HMM once its sale is officially announced.”
His company has the funds ready to buy the majority stake in HMM and a special team to prepare for the possible acquisition of HMM has already been created.
“We believe a reasonable price for HMM is about KRW4trn ($3.15bn). We can even offer up to KRW4.5trn but if the price goes above that level by even one won, we will give it up,” the chairman said.
SM Group is now HMM’s third-largest stakeholder, with a total stake of 6.56%, having recently upped its stake in the carrier.
“Considering my age of 72, I have decided to buy HMM as my last mission — to reinvigorate our nation’s shipping industry by making us Asia’s No.1 shipping company,” Woo told the Korea Economic Daily.
Best known for its construction business SM Group is the 30th largest conglomerate in South Korea with Woo well known in local business circles for his merger prowess. He founded SM Line, buying up assets from Hanjin Shipping, which went bust in 2016. SM Line is roughly an eleventh of the size of HMM in terms of teu capacity leading one Korean reporter to liken this potential acquisition to a shrimp eating a whale.
The long-mooted sale of HMM is expected to garner other local bidders and is one of a number of Korean shipowners to be put up for sale this year.
