Hanjin Proposes Merger of Heavy Industry, Engineering and Construction

Hanjin Group announce on May 11 that it decided to merge the Hanjin Heavy Industries Co., Hanjin Engineering & Construction Co. and Hanjin Construction Co. at the directors' meeting of the three companies held on May 10.
Hanjin said that this decision is made to meet the government's restructuring criteria and to overcome the economy crisis. The group also hopes to improve stability by dispersing the management risks with the merger of heavy industry and construction which have different business cycles.
The merger ratio was set at one Hanjin Heavy Industries share to 0.9432 Hanjin Engineering & Construction share and 1.45 Hanjin Construction.
After the merger, the company will be reborn as a firm with capital of 318 billion won, 5,400 workers and 2.7 billion won of annual sales.
According to the agreement concluded on May 10, each company will hold a general meeting of stockholders for approval on July 1 and open the merger corporation on August 1.
The group mentioned that it will be able to aggressively pursue the lucrative train market. Hanjin will also sell the city gas business to overseas capital as a condition of the merger.
Currently, Hanjin Group consists of 18 companies.
Jooan Kang : jooan@joongang.co.kr