HMM Emerges as Preferred Bidder for SK Shipping
Deal News | Feb 20, 2025 | EIN
In a pivotal move within South Korea's shipping industry, Hahn & Company has designated HMM as the preferred bidder for SK Shipping's management rights. This decision was announced by the investment banking sector and involves Morgan Stanley as the sale manager. HMM will undertake due diligence until mid-next month prior to finalizing the acquisition. Hahn & Co. holds a 71.43% stake in SK Shipping, purchased for 1.5 trillion won in 2018, while SK Corp. has a 16.35% stake. The potential sale of SK Shipping, a significant player in transporting crude oil and LNG, is poised to alter South Korea's shipping sector landscape. Central to this sale is the valuation of SK Shipping's business divisions; Hahn & Co. seeks a 4 trillion won valuation while HMM deems 2 trillion won more appropriate, creating a negotiation hurdle. Financially, SK Shipping's 2023 performance recorded sales of 1.8865 trillion won and an operating profit of 367.1 billion won, framing the valuation debate. Meanwhile, HMM, with 2024 sales of 11.7002 trillion won and an operating profit of 3.5128 trillion won, possesses the financial strength for M&A, yet is entangled in a non-compete clause from its prior LNG division sale to IMM Private Equity, potentially complicating the deal. The parties intend to negotiate final acquisition terms post-due diligence, aspiring to sign a stock purchase agreement.
Sectors
- Shipping
- Private Equity
- Investment Banking
Geography
- South Korea – The central geographic focus of the article, given the involvement of South Korean firms and the potential impact on the South Korean shipping industry.
Industry
- Shipping – The article revolves around the sale of SK Shipping, a significant entity in the shipping industry, particularly in the transport of crude oil and LNG.
- Private Equity – Hahn & Company, a private equity firm, is a principal player in the potential transaction, having acquired SK Shipping previously.
- Investment Banking – Morgan Stanley's role as the sale manager highlights the financial advisory and transaction structuring aspects of the deal.
Financials
- 1.5 trillion won – Purchase price paid by Hahn & Company to acquire SK Shipping in 2018.
- 4 trillion won – Valuation Hahn & Co. seeks for SK Shipping's business areas.
- 2 trillion won – Valuation regarded as appropriate by HMM for SK Shipping.
- 1.8865 trillion won – Sales figure for SK Shipping in 2023.
- 367.1 billion won – Operating profit of SK Shipping in 2023.
- 11.7002 trillion won – Sales figure for HMM in 2024.
- 3.5128 trillion won – Operating profit of HMM in 2024.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| HMM | Preferred Bidder | Company | HMM is selected as the preferred bidder for acquiring SK Shipping, a significant player in the shipping industry. |
| SK Shipping | Target Company | Company | SK Shipping is the company whose management rights are being sold, noted for its role in crude oil and LNG transportation. |
| Hahn & Company | Selling Company | Company | Private equity firm owning a significant stake in SK Shipping and managing the sale of the company's management rights. |
| Morgan Stanley | Sale Manager | Company | An investment bank acting as the sale manager for the transaction between Hahn & Company and the preferred bidder. |
| IMM Private Equity | Other Company | Company | Possesses a non-compete agreement with HMM from a previous sale, which may influence the current transaction. |
| SK Corp | Other Company | Company | Holds a minority stake in SK Shipping. |