Harim Group Selected as Preferred Bidder for HMM, Signaling Start of Privatization

SEOUL - Harim Group has been named the preferred bidder for HMM Co., South Korea's top container shipper, as announced by the controlling shareholders on Monday. This selection marks the beginning of the privatization process for the shipping company.

According to Yonhap News Agency, Last month, the state-run Korea Development Bank (KDB) and the Korean Ocean Business Corp., two major state agencies, conducted the final round of bidding for their controlling stake in HMM. The bidding attracted interest from the Harim-JKL Partners consortium and Dongwon Group. Sources indicate that the Harim-led consortium offered approximately 6.4 trillion won (US$4.92 billion) for 398.8 million shares, slightly outbidding Dongwon. These shares were originally obtained by KDB and the corporation through a debt-for-equity swap seven years ago.

The Harim-JKL Partners consortium reportedly scored higher in various factors, including the approach to financing the takeover. KDB and the Korean Ocean Business Corp. are planning to sign a stock purchase agreement with the Harim-led consortium following negotiations on the details of the takeover. The deal is expected to be finalized in the first half of the next year.

Harim Group, which owns Harim Co., the largest poultry-processing company in the country, and JKL Partners, a prominent private equity fund, faced delays in the announcement of the prime bidder due to several conditions they set for the takeover. One such condition was the request to postpone the conversion of perpetual bonds into equity for three years post-purchase. However, these demands were reportedly withdrawn prior to the announcement.

The successful acquisition by Harim Group would significantly raise its assets to 42.8 trillion won, positioning it as the 13th-largest conglomerate in South Korea, a notable rise from its current ranking. Harim Group also owns Pan Ocean Co., the country's leading bulk carrier and the second-largest shipping company by sales.

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