Hanwha shakes up its corporate structure, grouping related businesses together

Industry

Published: 29 Jul. 2022, 16:34

Hanwha shakes up its corporate structure, grouping related businesses together

A rendering of Hanwha Impact's hydrogen and renewable energy businesses [HANWHA IMPACT]

Hanwha made a major shake-up to its corporate structure on Friday, putting related businesses under the same umbrella.

Hanwha Aerospace will merge its wholly-owned subsidiary Hanwha Defense and a defense division of Hanwha Corporation, a holdings unit of Hanwha. The engine-specialized Aerospace acquired a full stake in the holding unit’s division for 786 billion won ($605 million), according to an electronic disclosure.

Hanwha Aerospace supplies engines for fighter jets and combatant ships while Hanwha Defense specializes in artillery systems, armed vehicles and air defense systems. The holding company’s division sells laser weapons and missile systems.

The consolidation will help the company enter new markets and scale up the defense business, Hanwha Aerospace said, setting the goal of becoming one of the top 10 players in the industry.

Aerospace’s defense orders were centered around the United States and European countries, but the merged units have exported their arms products to Australia, Turkey, India, United Arab Emirates and Egypt.

Hanwha Aerospace CEO Shin Hyun-woo said that the combined unit will be better positioned to make investments into advanced technologies.

“We will preemptively allocate investments into research and development to secure advanced techniques such as autonomous driving, energy storage and automated battlefield situation tracking,” Shin said in a statement.

To better create synergy across different defense sectors, Aerospace plans to build a new research center.

Conversely, the holdings company will acquire Hanwha Precision Machinery, an equipment manufacturer previously owned by Aerospace, for 525 billion won.

Hanwha Corporation also merged its wholly-owned Hanwha Engineering and Construction (E&C).

The acquirer said that the decision is intended to turn its business focus toward energy, infrastructure and high-tech machinery from defense.

“Hanwha Corporation presently runs business for renewable energy processing equipment and other machines used to make semiconductors and display panels,” the holdings unit said in a statement.

“By combining with Hanwha Precision Machinery, it will be focused on accelerating growth in renewable energy processing and build the basis to develop into a company specializing in semiconductor equipment in the mid-to-long term,” it said.

With the merger of Hanwha E&C, the holdings company will expand its renewable energy offerings to include wind power on top of the manufacturing of solar power cells and modules. E&C has built wind power plants in Yangyang County, Gangwon and on Jeju Island.

Hanwha Impact, a chemical and energy-focused affiliate, will acquire Hanwha Power Systems from Aerospace for 210 billion won.

Given that Power Systems has expertise in air compressors, the acquisition will help Impact gain advantage in developing its hydrogen business.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]