Hanwha holding company to divide in two as tech, lifestyle units spun off

Hanwha Corp., the holding company of the Hanwha Group's vast empire spanning everything from defense and energy to finance and consumer services, will be split into two, the group decided Wednesday.

From left: Kim Dong-kwan, vice chairman of Hanwha Solutions; Kim Dong-won, vice chairman of Hanwha Life; and Kim Dong-seon, managing director at Hanwha Hotels & Resorts. [JOONGANG ILBO]

Hanwha Corp., the holding company of the Hanwha Group's vast empire spanning everything from defense and energy to finance and consumer services, will be split into two, the group decided Wednesday.

The move effectively separates the tech-and-lifestyle portfolio that has largely been led by Vice President Kim Dong-seon, the third son of Hanwha Group Chairman Kim Seung-youn.

The newly established Hanwha Machinery & Service Holdings will include tech affiliates such as Hanwha Vision, Hanwha Momentum, Hanwha Semitech and Hanwha Robotics, along with lifestyle affiliates including Hanwha Galleria, Hanwha Hotels & Resorts and Ourhome.

Hanwha Corp. said Wednesday that its board of directors approved a demerger plan that will leave shipbuilding and offshore, energy and finance operations under the surviving company, while creating a new entity to oversee affiliates in the tech and lifestyle businesses. The company plans to complete the split in July after the required procedures, including an extraordinary shareholder meeting in June.

Even during recent restructuring efforts, Hanwha Group maintained a conglomerate structure by bundling diverse business divisions under Hanwha Corp. With businesses exposed to different industry cycles and operating models housed in a single company, the structure has been cited as a factor behind the conglomerate discount that prevents the firm from being properly valued by the market.

After the split, the surviving company will retain defense, shipbuilding and offshore and energy affiliates such as Hanwha Aerospace, Hanwha Ocean and Hanwha Solutions, overseen by Group Vice Chairman Kim Dong-kwan, the chairman’s eldest son, as well as financial affiliates such as Hanwha Life, led by President Kim Dong-won, the second son.

The split ratio, calculated based on net asset book value, was set at 76.3 percent for the surviving company and 23.7 percent for the new company. Existing shareholders will receive shares in both firms in proportion to that ratio.

Hanwha Group Chairman Kim Seung-youn, front left, and Vice Chairman Kim Dong-kwan, front right, visit the Hanwha Systems Jeju Space Center on Jan. 8. [NEWS1]

Business figures and investors are also watching how the move fits into Hanwha Group’s succession picture. With the split, Kim Dong-kwan will remain at Hanwha Corp., overseeing the defense, shipbuilding, offshore and energy businesses, while Kim Dong-won stays with the financial arm. Kim Dong-seon, who has led the tech and lifestyle portfolio, will head an independent structure, effectively laying the groundwork for a three-brother separation of affiliates over the mid- to long term. Following Chairman Kim Seung-youn’s gifts of shares, the owner family’s stake in Hanwha Corp. as of Dec. 17, 2025, was reshuffled to Kim at 11.32 percent, Kim Dong-kwan at 10.44 percent, Kim Dong-won at 5.38 percent and Kim Dong-seon at 5.43 percent. The subsidiary Hanwha Energy owns a 22.16 percent share of the entire group. At the top of the group’s governance structure, Hanwha Energy is held 50 percent by Kim Dong-kwan, 20 percent by Kim Dong-won and 10 percent by Kim Dong-seon. This followed a December 2025 transaction in which Kim Dong-won and Kim Dong-seon sold 5 percent and 15 percent stakes, respectively, in Hanwha Energy to Korea Investment Private Equity.

With the demerger, Kim Dong-kwan is expected to strengthen his grip on Hanwha Corp., the group’s main pillar, prompting assessments that the group's management succession has effectively been completed with him at the center.

Hanwha Group Chairman Kim Seung-youn, center, and Vice Chairman Kim Dong-kwan, far left, inspect a full-scale model of a 15-centimeter-resolution (6-inch), ultra-high-resolution synthetic-aperture radar satellite in very low Earth orbit during their visit to Hanwha Systems’ Hanwha Space Center on Jeju Island on Jan. 8. [HANWHA GROUP]

Along with the demerger, Hanwha Corp. also said it will pursue measures to boost shareholder value, including treasury share cancellations and higher dividends. The company plans to cancel 4.45 million common shares, excluding restricted stock units for employee compensation, after completing related procedures such as a shareholder meeting.

The canceled shares are worth 456.2 billion won ($308.8 million), representing 5.9 percent of total common shares, and the company said it is the largest treasury share cancellation since the launch of the Lee Jae Myung administration.

Hanwha Corp. also set a minimum dividend per share for common stock at 1,000 won, up 25 percent from the 800 won paid last year. In addition, after delisting its preferred shares in 2025, the company said it will acquire and cancel all 199,033 remaining legacy preferred shares through off-market purchases.

According to the Korea Exchange, Hanwha Corp. shares rose more than 23 percent intraday after the company announced the demerger and shareholder return plan.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom. BY KO SUK-HYUN [kim.minyoung5@joongang.co.kr]