HMM launches due diligence for SK Shipping acquisition

South Korea’s major shipping company HMM is exploring the acquisition of SK Shipping, excluding its liquefied natural gas (LNG) transportation division, in a deal valued at approximately 2 trillion won (US$1.4 billion), according to investment banking sources.

HMM is currently conducting due diligence on SK Shipping’s tanker, liquefied petroleum gas (LPG) carrier, bulk cargo, and other shipping businesses from its majority owner, Hahn & Co, while Morgan Stanley seems the manager of the sale process.

The exclusion of SK Shipping’s LNG division from the potential deal is likely due to a 2014 agreement when HMM sold its own LNG shipping business. As part of that agreement, HMM is barred from reentering the LNG sector until 2029.

The South Korean ocean carrier is weighing a full acquisition of SK Shipping’s non-LNG operations but has yet to reach a final decision. The due diligence process is expected to conclude by next month, with a formal proposal to the board of directors anticipated as early as April.

Hahn & Co. acquired an 83.65% stake in SK Shipping, South Korea’s largest tanker and dry bulk shipping operator, in 2018 from SK Group, the nation’s second-largest conglomerate, which divested the company to comply with tunneling regulations.

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