Daewoo Shipbuilding enters new chapter as Hanwha Ocean  

Daewoo Shipbuilding & Marine Engineering Co. (DSME), South Korea’s cash-deprived second-largest shipbuilder, has rebranded itself Hanwha Ocean Co., bowing out of its nearly 50-year-old Daewoo title to take back control of the international shipbuilding market and carve out a new identity as the global energy leader.

“We will turn Hanwha Ocean into the global marine engineering and energy leader,” said Kwon Hyuk-woong, the newly appointed president and chief executive of Hanwha Ocean.

Kwon pledged to repeat DSME’s earlier glory as the global and Korean No. 1 shipbuilder under the new badge by instilling Hanwha Group’s technology-first corporate culture. He added that the company will present a new roadmap for growth under the new identity in 100 days.

With the new name, DSME finally abandoned the Daewoo brand, which has been engraved on its vessels for 45 years since it joined the now-defunct Daewoo Group in 1978.

Hanwha Ocean passed the name change at an extraordinary shareholders’ meeting on Tuesday, where new board members were approved. Kim Dong-kwan, the de facto heir of Hanwha Group, has joined the shipbuilder as a non-executive director on the board.

Hanwha Ocean let go of 28 directors from DSME’s old board while keeping 15 members.

CONDITIONAL APPROVAL

The latest organizational makeover comes about a month after South Korea’s Fair Trade Commission (FTC) in late April gave the green light to Hanwha Group’s 2 trillion won ($1.5 billion) takeover of the embattled DSME on conditions of resolving anti-competition concerns.

The FTC nod finally cleared the way for the deal after the European Union, Japan, China and many other countries approved it.

Korea’s 10th largest conglomerate in September last year agreed to buy a controlling 49.3% stake in DSME on expectations of synergy with its strategic businesses.

The chemical major has rapidly expanded its presence in the arms manufacturing sector, led by ammunition and arms manufacturer Hanwha Defense Co. It is now a leading manufacturer of weapons and warship components such as radars and navigation systems.

Its acquisition of DSME, which is the world’s largest warship and submarine builder, is expected to facilitate its defense-related business growth.

But the FTC’s conditional approval for the marriage of DSME and Hanwha comes with a ban on Hanwha’s sale of naval ship components to the renamed entity at prices lower than those of competitors.

Hanwha Ocean is also required not to refuse the country’s defense agency’s request for technology information on naval ship equipment for unreasonable reasons.

It was the second attempt by Hanwha Group to take over the debt-ridden shipbuilder DSME from the state-run Korea Development Bank (KDB), the shipbuilder’s main creditor, after its first try in 2008 faltered in the wake of the global financial crisis.

Five Hanwha Group units, including Hanwha Aerospace Co. and Hanwha Systems Co., have split ownership of the 49.3% stake in Hanwha Ocean.

Write to Hyung-Kyu Kim at khk@hankyung.com

Sookyung Seo edited this article.