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Hanwha Techwin’s Stock Rises 20% Two Days after Succession of Samsung Techwin
Synergistic Merger
Hanwha Techwin’s Stock Rises 20% Two Days after Succession of Samsung Techwin
  • By matthew
  • July 2, 2015, 07:30
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Kim Cheol-gyo (left), CEO of Hanwha Techwin, and Chang Si-kwon (right) CEO of Hanwha Thales.
Kim Cheol-gyo (left), CEO of Hanwha Techwin, and Chang Si-kwon (right) CEO of Hanwha Thales.

 

The Hanwha Group completed its merger with Samsung Techwin and Samsung Thales, which were subsidiaries of the Samsung Group, on June 29.

The Hanwha Group has now completed the complex deal of taking over four subsidiaries of Samsung, which was announced in Nov. last year. Hanwha L&C and Hanwha Total became Hanwha Group’s subsidiaries at the end of April this year, and Hanwha Techwin and Hanwha Thales have just become Hanwha’s subsidiaries of the group, placing Hanwha Group in the number one position in the defense and petrochemicals industries. The total acquisition price of the takeovers is 1.8541 trillion won (US$1.6458 billion).

Samsung Techwin and Samsung Thales changed their names to Hanwha Techwin and Hanwha Thales, respectively, in extraordinary general meetings of shareholders separately held on June 29.

Kim Cheol-kyo, the current CEO of Hanwha Techwin, kept his position, while Hanwha Thales appointed Chang Si-kwon as its CEO, who was previously the vice president of the defense business division.

After the extraordinary general meetings of shareholders, Hanwha Group paid 471.9 billion won (US$418.9 million) out of 823.2 billion won (US$730.7 million), which is the total acquisition price of Samsung Techwin. As a result, the Hanwha Group took over a 32.4 percent share of Samsung Techwin, being the company’s largest shareholder, securing management rights. The Hanwha Group has also secured a 50 percent share of Hanwha Thales.

Hanwha Techwin has a 23.4 percent share of Hanwha L&C and took over a 57.6 percent share of Samsung General Chemicals last April. As a result, the Hanwha Group controls an 81 percent share of Hanwha L&C.

As the Hanwha Group obtained Hanwha Techwin and Hanwha Thales, the group’s revenue from its defense business increased to 2.7 trillion won (US$2.4 billion), making the group the “number one defense business” in the country. The group also secured bridgeheads to future businesses such as precision machinery and electronics & information technology (IT). Moreover, the group expanded its business area to defense electronics, such as self-propelled artillery, aircraft engines, and naval radar.

The Hanwha Group plans to develop civilian businesses such as chip mounters, energy equipment, and engine parts as their driving force for future growth.

Hanwha Techwin and Hanwha Thales are operated separately, and their existing employees will be maintained.

The stock price of Hanwha Techwin (formerly Samsung Techwin) rose by 20.48 percent on July 1, just two days after it became Hanwha Group’s subsidiary. This may come from the financial sector’s expectation of long-term synergy due to the merger.