HD KSOE secures controlling stake in STX Heavy Industries

[HD KSOE, STX HEAVY INDUSTRIES]

HD Korea Shipbuilding & Offshore Engineering (HD KSOE) acquired STX Heavy Industries, securing a 35 percent stake in the local ship engine maker for 81.3 billion won ($63.7 million).

HD KSOE, inked a contract for the acquisition with Pinetree Partners, a local private equity firm, on Monday.

Under the acquisition, the intermediate sub-holding company of HD Hyundai will take over 6,520,000 shares in STX Heavy Industries held by Pinetree Partners, along with 5,360,000 newly issued shares via a third-party allotment. This will bring HD KSOE's stake in the company to 35 percent, positioning it as the largest shareholder.

The strategic move aims to bolster HD KSOE's large engine production capacity and strengthen its position in the highly competitive ship engine market. STX Heavy Industries' expertise in ship engines and shipbuilding materials makes it a valuable addition to HD KSOE's portfolio.

Looking ahead, HD KSOE will support STX Heavy Industries' independent management system and capitalize on its eco-friendly engine technology. Specializing its production lines to include dual-fuel engines, diesel engines, and other environmentally conscious products also aligns with HD KSOE's commitment to achieving greater process efficiency and maximizing production capacity.

"By integrating HD Hyundai Heavy Industries' engine technology, we will meet the growing demand for eco-friendly engines, resulting in new opportunities through synergy within the shipbuilding group,” an HD KSOE official said.

HD KSOE's subsidiary, HD Hyundai Heavy Industries, achieved a milestone in March by producing the world's first 200 million brake horsepower (BHP) in cumulative marine engine production. The achievement was reached 44 years after the company started producing large-sized shipping engines in 1979. Two-hundred million BHP is equivalent to the combined output of 1.25 million midsize sedans.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]