No buyer for HMM (yet)
The bidding process for South Korea's key global container carrier, HMM, has finally failed. From the original six bidders that emerged (Hapag-Lloyd, SM Group (SM Line), LX Holdings, Dongwon Group, Global Sae-A. and Harim) just the latter remained in the end – with a partner company.
But Harim, a major food and agribusiness group in South Korea and shareholder of Pan Ocean, has now also quit as the last local bidder.
The majority stake is still held by the state policy bank KDB and Korea Ocean Business Corporation (KOB) after the bankruptcy of Hanjin Shipping in 2017, with 57.9% of their 75% ownership having been for sale. There are also minor shareholders like SM Line which enlarged its stake to 6.66% by acquiring additional HMM shares in summer 2023.
In December last year, a consortium of Harim and Seoul-based JKL Partners was chosen as the preferred bidder. The consortium offered KRW 6.4 trillion (USD 5 billion) for the stake, about KRW 200 billion more than the second shortlisted bidder, the Dongwon Group. The major issue of concern was the control of the company’s future management. KDB and KOB wanted to keep monitoring HMM as its top creditors.
To allow more time for debate, the two state-owned institutes and the Harim consortium extended the deadline of their first-round negotiations to 6 February 2024. Now, the Harim consortium has given up the acquisition by not coming back on the terms in time before the end of the deadline.
Since no local bidder was able to meet the expectations of KDB and KOB, the two institutions might reflect South Korea’s decision in September 2023 to make Hapag-Lloyd opt out of the bidding process due to their preference for a national solution. (cd)