Seoul: HD Hyundai Heavy Industries Co. and HD Hyundai Mipo Dockyard Co. are set to merge into a unified shipbuilding entity under a restructuring plan approved by their respective boards. This strategic move aims to bolster their shipbuilding and defense capabilities.

According to Yonhap News Agency, the boards of both companies, which are affiliates of HD Hyundai's intermediate holding company, HD Korea Shipbuilding and Offshore Engineering Co. (KSOE), have approved the merger plan. The merger is expected to be finalized by December, leading to the relaunch of the combined entity as HD Hyundai Heavy Industries within the year.

The newly formed company has ambitious plans, setting a defense sales target of 10 trillion won (US$7.2 billion) annually by 2035. HD KSOE stated that the restructuring is intended to maximize synergies through expansion and accelerate the development of cutting-edge technologies, thereby securing a competitive edge in the global market.

This merger comes in the wake of South Korea's recent announcement to enhance its shipbuilding collaboration with the United States under a new initiative named "Make American Shipbuilding Great Again."