Report: HMM to Diversify Position in Korean Shipping Acquiring SK Shipping

 

HMM, which itself was the subject of takeover talks a year ago, is poised to consolidate the South Korean shipping industry. According to a report in Business Korea and other media outlets, HMM has been selected as the preferred bidder to acquire control of SK Shipping, Korea’s leader in energy shipping. The deal aligns with HMM’s declared strategy to expand beyond its primary operations in container shipping.

SK Shipping was started in 1982 and remained a part of the SK Conglomerate until being acquired in 2018 by investment group Hahn & Co. Since then, the company has been reshaped shedding old ships and building its position in crude oil, LNG, LPG, bulk shipping, and bunkering.

Hahn has been exploring selling the crude oil tankers and then in October 2024 was reported to have retained Morgan Stanley to shop the company. Hahn paid approximately $1 billion for a stake that today is nearly 80 percent of SK Shipping with the media reports saying Hahn is seeking $2.8 billion for control of the company. The former parent, SK Group, retains approximately 16 percent ownership.

HMM is reported to be starting due diligence after being selected as the preferred bidder. The media reports suggest a deal would be completed by as early as April.

In addition to discussions on the valuation, one challenge the media reports highlight is a non-compete agreement that still covers the LNG business for HMM. During the restructuring of the former Hyundai Merchant Marine, the company in 2014 sold its LNG carrier business to an investment firm and entered into a non-compete agreement in place till 2029. HMM recently explored reacquiring its LNG business but the investment firm in late 2024 delayed the sale of the unit for two more years.

Speculation is that HMM might proceed without the dozen LNG carriers owned by SK Shipping. HMM is expected to make an offer of $1.4 billion for the 22 crude oil tankers, 14 LPG carriers, 10 bulk carriers, and seven bunker ships. It would expand and diversify HMM’s tanker and non-container operations.

The sale of HMM by the state-controlled banks was canceled in 2024 when the banks failed to come to terms with Harim Group and private equity fund JKL Partners which had been selected as the preferred bidder. HMM has emphasized a growth strategy continuing after it reported its third-highest-ever sales in 2024 topping performance during the peak of the pandemic-related surge in shipping. 

HMM is currently ranked eighth in container shipping with a total capacity of just over 900,000 TEU. To increase profitability the company said it will be introducing 12 new 13,000 TEU containerships deploying them on routes to the Americas and opening a new route to Mexico. The company has an orderbook for nine additional containerships with 9,000 EU capacity and methanol or LNG fueled. HMM is also poised to enter ownership in the car carrier sector ordering ships that will operate under long-term charters to Hyundai-Glovis.