Hanwha Techwin will spin off its defense, energy equipment and industrial equipment business units into three subsidiaries.
Once the spin-off is completed, Hanwha Techwin will be divided into four companies – its surviving entity and its three subsidiaries tentatively called Hanwha Dynamics, Hanwha Power System and Hanwha Precision Machine. After the spin-off, Hanwha Techwin will operate only aeroengine, robot and security business units.
On April 27, Hanwha Techwin held its board meeting and decided to physically spin off its defense, energy equipment and industrial equipment business sectors to build three separate subsidiaries by July 1.
Considering the common denominator of ground defense business, Hanwha Defense, one of current subsidiaries of Hanwha Techwin, will be merged with Hanwha Dynamics, a newly established defense firm. Hanwha Systems will remain as one of Hanwha Techwin’s subsidiaries.
Accordingly, Hanwha Techwin will have four subsidiaries – Hanwha Systems, Hanwha Dynamics, Hanwha Power System and Hanwha Precision Machine. It will also run Hanwha Defense as its sub-subsidiary. After the spin-off, Hanwha Techwin, which is the surviving entity, will focus on its aeroengine business to jump into a global aeroengine component and module producer as well as continuously invest in potential new growth engines, including cooperating robot system.
Hanwha Techwin has decided to exclude its security unit, which produces video surveillance cameras and systems like CCTV, for the spin-off. However, it will consider an equity spinoff of the unit in the future as the business has a low association with other units in Hanwha Techwin and it has to raise its own brand value.
Hanwha Techwin split its business and operated separately the three sectors of air defense, security and industrial equipment, which have different business characteristics, in December 2015, significantly improving business performance last year. Accordingly, the industry stressed the need of more subdivided and specialized management.
The new defense business unit will push ahead with strategic collaboration with Hanwha Group’s other defense companies – defense unit at Hanwha Corporation and Hanwha Systems.