Korea Shipowners' Association Voices Opposition to POSCO's HMM Takeover Plan

HMM container ship (Photo: HMM)

The Korea Shipowners' Association has come out in strong opposition to reports that the nation's top steel mill is involved in a potential takeover of the national carrier, HMM.

Last week, Splash reported that consultants from Samil PwC and Boston Consulting Group have been working with POSCO on feasibility studies for a deal potentially worth around KRW 7 trillion ($5 billion), which would include a total of 71.7% of shares held by state creditors.

The state-run Korea Development Bank (KDB) has been sounding out potential buyers for years. Hyundai Glovis, LX Pantos, and SM Line have all been mentioned, but no deal has progressed. Back in 2021, POSCO's name was also on the list for consideration, although the rumored price at the time was just a quarter of what it is today.

The Korea Shipowners' Association issued a statement today, saying that HMM – rebuilt at a huge expense using taxpayer money – could "degenerate into a subsidiary for POSCO’s in-house cargo transport" instead of competing with global container lines. The concern is that if POSCO's core steel business runs into difficulties, HMM could once again be sacrificed, undoing years of restructuring under the government's own shipping industry reconstruction plan.

The association pointed to three specific risks: first, the container shipping industry – a highly specialized global business – would be subjected to inexpert management; second, POSCO could use HMM primarily for its own cargo, squeezing out domestic competitors; and third, this would "collapse the foundation of Korea’s shipping industry" and harm exporters.

The shipowners pointed to POSCO's own failed joint venture with Geoyang Shipping as evidence of the risks when industrial shippers try to run shipping lines. They also cited the case of Vale in Brazil as another cautionary tale.

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Source: Phaata.com (According to Splash247)

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