Seoul: Hanwha Corp., the de facto holding company of the defense-to-shipbuilding conglomerate Hanwha Group, announced on Wednesday its plans to establish a new holding company dedicated to its technology and lifestyle sectors, while retaining its defense and shipbuilding operations. This strategic move is part of Hanwha's efforts to refine its corporate governance structure.
According to Yonhap News Agency, Hanwha's board of directors approved the plan, with the spin-off expected to be finalized in July following an extraordinary shareholders' meeting in June. Under this plan, technology affiliates such as Hanwha Vision Co. and Hanwha Robotics Co., along with lifestyle units including Hanwha Galleria Corp. and Hanwha Hotel and Resorts, will be consolidated under a newly established holding company called Hanwha Machinery and Service Holdings.
The company's defense, shipbuilding, and offshore units, including Hanwha Aerospace Industries Co. and Hanwha Ocean Co., along with energy and financial units such as Hanwha Solutions and Hanwha Life Insurance Co., will remain under the existing Hanwha Corp. "The move is aimed at allowing each business division to adopt management strategies tailored to market conditions and enable faster decision-making," a company official stated.
Following the division, Hanwha Corp. intends to concentrate on its core defense and shipbuilding businesses. At the same time, the new holding company will have the autonomy to make timely investments in previously undervalued sectors. Hanwha anticipates that this reorganization will significantly mitigate the complex conglomerate discount, a key factor contributing to the company's previous undervaluation.
The split ratio has been determined at 76.3 percent for the surviving company and 23.7 percent for the new entity, based on net asset book value. Existing shareholders will receive shares in both companies in alignment with this ratio. Additionally, Hanwha announced the cancellation of 456.2 billion won (US$308 million) worth of treasury shares on Wednesday, as part of its efforts to enhance shareholder value.