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Photo credit: HD Hyundai Group |
[Alpha Biz= Paul Lee] HD Hyundai Group is considering the acquisition of the Subic Shipyard in the Philippines to expand its Southeast Asian production base and enter the maintenance, repair, and overhaul (MRO) business for U.S. Navy vessels stationed in Asia.
The sale is expected to be a two-horse race, with HD Hyundai Group and Hanwha Group, both of which own major shipyards in Korea, receiving the proposal.
According to a report by Seoul Economic Daily on Thursday, Severus Capital, a U.S.-based private equity firm that holds the management rights to the Subic Shipyard, has made an acquisition proposal to HD Hyundai, and the company is currently in in-depth discussions.
Severus Capital also approached Hanwha Ocean regarding the acquisition, but industry experts believe HD Hyundai has a higher chance of winning the deal. The target for acquisition is Severus Capital’s 83% stake, with the purchase price estimated to be around 500 billion KRW.
The Subic Shipyard, which was built by Hanjin Heavy Industries and completed in 2009, was once one of the world's top five shipyards. After undergoing restructuring in 2019, it was revived under Severus Capital’s ownership. The U.S. Navy previously used the facility for ship repairs, and it is currently leased by the Philippine Navy. Industry experts believe that it could serve as a key base for U.S. Navy vessel orders in Asia.
Industry attention is focused on HD Hyundai Group’s potential acquisition, as the group has already begun collaborating with the Subic Shipyard. A subsidiary of HD Hyundai, HD Hyundai Heavy Industries, set up a military support center at Subic Shipyard in 2022 and started MRO operations for Philippine naval ships. In 2024, HD Korea Shipbuilding & Offshore Engineering, the intermediate holding company for HD Hyundai’s shipbuilding division, plans to lease part of the shipyard for its offshore wind turbine substructure business.
The Subic Shipyard’s major advantage is its ability to handle U.S. Navy vessel MRO business despite being outside the U.S. mainland. Having been a base for the U.S. Navy in the past, it is now used by the Philippine Navy for repairs, and it has strong ties with the U.S. through leasing agreements with U.S. defense companies.
While acquiring a U.S.-based shipyard would be favorable for aligning with the Trump administration’s robust shipbuilding protection policies, it would incur significant costs for additional facility investments and labor force expansion.
The different strategies pursued by the two groups within the same industry are also drawing attention. Both groups previously competed to acquire Daewoo Shipbuilding & Marine Engineering, but Hanwha ultimately acquired it in 2023 and launched Hanwha Ocean. Since then, the competition between the two groups has intensified. Hanwha has taken an aggressive approach to acquisitions, while HD Hyundai focuses more on individual collaborations rather than broad investments.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
