Hanwha Group Acquires Philly Shipyard in $100 Million Deal

South Korea's Hanwha Group has agreed to acquire Philly Shipyard from Norwegian owner Aker Capital for $100 million. This acquisition will bolster Hanwha’s presence in the U.S. market, particularly in naval and government shipbuilding. Philly Shipyard, established in the late 1990s on the site of a former U.S. Navy facility, has a rich history of constructing Jones Act vessels for various clients like Matson, Crowley, and Kinder Morgan.

The transaction, split between Hanwha Systems and Hanwha Ocean, is expected to close in the fourth quarter of 2024, subject to regulatory approvals. Aker Capital, which owns about 60% of Philly Shipyard’s shares, will receive $100 million in cash, with the possibility of price adjustments if cost overruns exceed $100 million on current projects.

“The opportunity to collaborate with Philly Shipyard, a significant shipbuilder with a storied history, is an exciting strategic opportunity that will allow Hanwha Systems to deploy its state-of-the-art naval systems and associated technologies in the U.S. market,” said Sung-Chul Eoh, CEO of Hanwha Systems.

Over the years, Philly Shipyard has delivered approximately half of all new large ocean-going Jones Act commercial ships. Its current projects include building five training ships for MARAD, a rock installation vessel for Great Lakes Dredge and Dock Company, and three LNG-fueled containerships for Matson. The yard’s order book, valued at around $1.6 billion, extends through 2027.

“Recognized as a global leader, Hanwha brings a wealth of sophisticated shipbuilding experience that will enable Philly Shipyard to realize a grander vision for its employees and customers,” said Kristian Røkke, Chairman of Philly Shipyard ASA.”The acquisition aligns with Hanwha’s broader strategy to expand its global footprint in the shipbuilding industry. In April, Hanwha’s rival HD Hyundai signed a memorandum of understanding with Philly Shipyard to collaborate on U.S. government shipbuilding projects, marking increased competition between the two South Korean conglomerates.

Hanwha has also shown interest in acquiring Australian shipbuilder Austal, although regulatory concerns have delayed that deal. Despite these challenges, Hanwha remains committed to exploring further acquisitions and partnerships in the shipbuilding sector.