Harim Group to Buy HMM Shipping Firm for $4.9B After Selection as Preferred Bidder

Harim Holdings Co. Ltd. has been declared the preferred bidder for acquiring HMM shipping company. The company specializing in food and agribusiness is set to buy the leading sea carrier in South Korea for KRW6.4 trillion or about $4.9 billion.

As per Korea Joongang Daily, the decision to pick Harim Holdings as the preferred bidder for the sale of stakes in HMM was finalized by the main creditors: the Korea Development Bank (KDB) and the Korea Ocean Business Corporation (KOBC). The announcement for the selection was released on Monday, Dec. 18.

Financing the Buyout

The involved companies assigned a Harim-led consortium as the preferred bidder for a total of 57.9% stake sale in the HMM shipping firm. This is said to be equivalent to roughly 398.79 million shares.

For the financing of the multi-billion acquisition, it was reported that Harim is meeting acquisition financing worries head-on. To pay for the purchase of HMM, it plans to sell its subsidiary Pan Ocean Co. Ltd.'s perpetual bonds, rights offerings, and liquidation of vessels. In any case, Pan Ocean is also one of the largest shipping firms for bulk cargo, while JKL Partners, a private equity firm, is also part of the bidding group.

"KDB and KOBC selected the Pan Ocean-JKL consortium as the preferred bidder for the sale of HMM, and the deal will be finalized by the first half of 2024 following discussions on detailed terms," the Korean Development Bank said in a statement.

Harim's Rival in HMM's Takeover Bid

The Korea Economic Daily reported that the Dongwon Group has been Harim's strongest competitor in acquiring HMM. The company was said to have immediately started preparing for the takeover of the shipping company since the sale was announced.

However, it failed to secure its bid and lost to Harim after offering a price that was about KRW100 billion lower. An official at Dongwon said it is more important to make an offer that the company can handle than to put up a price they cannot afford and suffer later.

Photo by: Harim Holdings Website