Harim Group to acquire HMM for $4.9 billion

Korean food firm Harim Group has been chosen as the preferred bidder for the acquisition of HMM, Korea's largest bulk shipping company, in a deal worth up to $4.9 billion. Parties expect to finalize a stock purchase agreement by the end of 2023.

[HARIM GROUP]

Korean food firm Harim Group, best known for its poultry products, has been chosen as the preferred bidder to acquire HMM, the nation's largest shipping company, in a deal that could fetch up to 6.4 trillion won ($4.9 billion).

The decision was finalized by the main creditors, the Korea Development Bank (KDB) and the Korea Ocean Business Corporation (KOBC) on Monday. The parties designated a Harim-led consortium as the preferred bidder for the sale of a 57.9 stake in HMM, equivalent to approximately 398.79 million shares.

“KDB and KOBC selected the Pan Ocean-JKL consortium as the preferred bidder for the sale of HMM, and the deal will be finalized by the first half of 2024 following discussions on detailed terms,” KDB said in a statement. Harim is also the parent company of Pan Ocean, the country’s largest carrier of bulk cargo. Private equity firm JKL Partners is also part of the bidding group.

The acquisition is estimated to be valued at 6.4 trillion won, according to media reports.

Harim, who began bidding against seafood company Dongwon Group for the HMM purchase in November, is now poised to engage in further due diligence and negotiations with the sellers. The parties expect to reach a conclusive stock purchase agreement (SPA).

The company's successful track record — including its adept management of Pan Ocean, which it acquired in 2015 — was reportedly considered in the selling parties' evaluation process, as was its strategic approach, including its plan to secure a self-financed sum of approximately 3.25 trillion won through asset securitization and perpetual bond issuance.

With the HMM acquisition, Harim Group's corporate ranking will jump to within the top 13.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]