Hanwha Energy to purchase $130.5 million stake in conglomerate's holding company

Hanwha Energy plans to purchase a stake in Hanwha's holding company valued at 180 billion won.

Hanwha's office building in Jung District, central Seoul [HANWHA]

Hanwha Energy, an energy unit wholly owned by the three sons of Hanwha Corporation Chairman Kim Seung-youn, will purchase a stake in Hanwha's holding company valued at 180 billion won ($130.5 million) via public tender offer between Friday and July 24.

This move is expected to accelerate the succession process centered on Hanwha Corporation Vice Chairman Kim Dong-kwan, the eldest son of Kim Seung-youn.

Hanwha Energy aims to buy 8 percent of Hanwha Corporation's shares, or 6 million, at 30,000 won per share, according to the holding unit's electronic disclosure released Friday. The bidding price per share is 7.72 percent higher than Thursday’s closing price of 27,850 won.

If the company acquires the intended shares, it will hold a 17.7 percent stake in Hanwha Corporation, becoming the holding company's second-largest shareholder after Chairman Kim.

“We made this decision to practice responsible management as a major shareholder and to enhance shareholder value,” Hanwha Energy said in a statement. “By increasing our stake in Hanwha Corporation, we aim to improve the overall stability and transparency of Hanwha Group’s governance structure and strengthen our responsible management as a major shareholder.”

Hanwha Energy intends to purchase all shares tendered before July 24 even if the number tendered falls short of the intended volume. If the purchased shares exceed the target quantity, the company will buy them on a pro rata basis.

Kim Seung-youn owns a 50 percent stake in Hanwha Energy while Kim Dong-won and Kim Dong-seon, respectively Kim Seung-youn's second and youngest sons, each own 25 percent.

Hanwha Energy also announced, in a separate electronic disclosure released Friday, that it would merge with its wholly-owned subsidiary, Hanwha Convergence, to streamline its management.

Hanwha Convergence is another energy division of Hanwha Corporation engaged in development, production, distribution, operation and sales in the energy sector.

“Through the merger, we expect positive financial impacts through the reduction of redundant costs and the enhancement of management efficiency achieved by the integrated operation of the energy industry,” the company said in a statement.

Following the news of the tender offer, Hanwha shares jumped 4.31 percent to close at 29,050 won on Friday.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]