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

Speculation surrounding the future ownership of South Korean shipping company HMM is intensifying, following the collapse of a previous sale attempt a year and a half ago. According to an exclusive report by The Korean Economic Daily, steel giant POSCO is actively formulating plans to acquire a controlling stake in the shipping firm, signaling a renewed interest in the maritime sector.

POSCO’s Strategic Shift and Market Challenges

POSCO, which had previously been considered a potential buyer, has altered its approach after opting out of a government auction for HMM in 2023. The company is now seeking new avenues for growth as it grapples with a slowdown in its core steel business and the adverse effects of U.S. tariffs on its products, including batteries. Historically, POSCO was involved in the shipping industry through its investment in Hanjin, which it divested in 1995. The current interest in HMM reflects a strategic pivot as the company looks to diversify its operations.

Since the 2016 government-led rescue of Hyundai Merchant Marine, HMM has been under the control of two Korean banks: the Korea Development Bank (KDB) and the Korea Ocean Business Corporation (KOBC). Together, these entities hold over 70 percent of HMM’s shares and have expressed intentions to privatize the company. This move aims to reallocate taxpayer funds to other investments that could stimulate growth in the Korean economy. KDB, which possesses approximately 36 percent of HMM, is reportedly spearheading the privatization initiative.

In the previous bidding process, Harim was selected as the preferred bidder, but negotiations fell apart in 2024 due to disagreements over management control post-privatization. As KDB prepares to initiate a new round of bidding, it is believed that POSCO is targeting a private acquisition of shares from KDB, while KOBC is likely to maintain its stake and co-manage HMM alongside POSCO.

HMM to Diversify Position in Korean Shipping Acquiring SK Shipping

Potential Bidders and HMM’s Business Diversification

Korean law mandates that any sale of HMM must occur through a public auction. However, the latest reports suggest that POSCO’s strategy could circumvent this requirement. If a new auction were to take place, companies like HD Hyundai Heavy Industries and Hanjin could emerge as potential bidders, with Harim also expressing continued interest in HMM.

In the meantime, HMM is actively pursuing a diversification strategy to expand beyond its primary focus on container shipping. The company has made attempts to acquire SK Shipping to enhance its dry bulk shipping capabilities. Additionally, HMM is reportedly looking to purchase individual vessels, including bulkers and tankers, and is in the process of constructing new containerships. The company has also ordered car carriers, which will be operated under charter by Hyundai-Glovis, along with four multi-purpose cargo vessels, further illustrating its commitment to broadening its operational scope.