Report: Korean Steel Giant POSCO is Exploring Acquiring Control of HMM

HMM containership — Reports indicate that new potential buyers are emerging for the government stake in HMM (HMM file photo)

Speculation is being renewed over the ownership fate of Korean shipping company HMM, a year and a half after the deal to sell the company collapsed. In an exclusive report, The Korean Economic Daily writes that steel giant POSCO is drawing up detailed plans to buy control of the shipping company.

The Korean Economic Daily reports that POSCO, which had previously been speculated as a potential suitor, has changed its strategy and now is interested in re-entering the shipping sector after deciding not to participate in the government auction in 2023 for control of HMM. POSCO was invested in Hanjin but sold the company in 1995. It reports that POSCO is searching for new growth strategies as it is facing a slowdown and the impact of U.S. tariffs on its steel business and batteries.

A controlling stake in HMM has been held by two Korean banks, the Korea Development Bank and the Korea Ocean Business Corporation, since the 2016 government-led rescue of Hyundai Merchant Marine. The two government entities collectively hold over 70 percent of stock in HMM, but have been talking of privatizing the shipping company to redeploy taxpayer monies to other investments to grow Korean business.

KDB, which owns an approximately 36 percent stake in HMM, is believed to be the leader in the privatization effort. The banks selected Harim as the preferred bidder last time, but the negotiations reportedly broke down in 2024 over a demand that the banks retain a say in the management of the HMM after the privatization. KDB is believed to be exploring starting a new round of bidding.

The Korean Economic Daily reports POSCO’s strategy is targeting acquiring the shares from KDB in a private deal. KOBC, which also holds approximately 36 percent, is believed to have decided to continue to hold its position, and the strategy calls for co-managing HMM between POSCO and KOBC.

Korean law requires that if the HMM is to be sold, it must be in a public auction. The newspaper reports that HD Hyundai Heavy Industries and Hanjin might be bidders if there were a new auction. Harim is also believed to still be interested in the business. The POSCO strategy, however, could avoid a public auction.

HMM has reported that it is pursuing a strategy to diversify its business, which is currently larger in container shipping. It attempted to buy SK Shipping to expand its dry bulk shipping. It is now reported to be pursuing individual vessel purchases of bulkers and tankers as well as building new containerships. It is also ordered car carriers, which will be operated under charter to Hyundai-Glovis, and four multi-purpose cargo vessels.