Shipbuilding market shakeup: South Korea’s HD Hyundai Heavy Industries and HD Hyundai Mipo to merge

August 28, 2025, by Naida Hakirevic Prevljak

South Korean shipbuilding companies HD Hyundai Heavy Industries (HHI) and HD Hyundai Mipo (HMD) have revealed plans to merge into a single entity.

The two companies are affiliates of HD Korea Shipbuilding & Offshore Engineering (HD KSOE), HD Hyundai’s intermediate holding company. HD KSOE explained that it is pursuing restructuring of its shipbuilding business to enhance global competitiveness and expand orders in Korea’s shipbuilding and defense sectors, as the ‘Make American Shipbuilding Great Again (MASGA)’ project is set to go into full swing.

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On August 27, 2025, HD KSOE, HD HHI, and HD HMD each held board meetings, where HHI and HMD approved a merger agenda. Following an extraordinary general meeting and merger review process, the two companies will relaunch this December as the consolidated HHI.

“This restructuring aims to maximize both quantitative and qualitative synergies, expand and diversify markets, and secure a decisive competitive edge in the fiercely contested global market through the preemptive development of advanced technologies,” the companies said.

China and Japan, Korea’s key competitors, have also recently completed mergers between their respective top two shipbuilders to strengthen competitiveness. In particular, the merger is set to provide HHI with a major opportunity to strengthen its competitiveness in the defense sector, which has been drawing increasing global attention.

HHI has accumulated advanced technology and extensive know-how in naval ship construction and exports. By combining this with HMD’s optimized dock facilities, equipment, and skilled workforce, HHI aims to capture opportunities in the rapidly growing global defense market.

Following the Korea-U.S. summit and the launch of the MASGA project, coupled with the global trend of naval forces enhancing their capabilities, demand for Korean defense is expected to continue rising.

HHI also plans to integrate both companies’ track records to further broaden market entry and share in the specialized vessel market—such as icebreakers, where demand is growing with Arctic development.

The company further aims to accelerate its technological edge by preemptively securing eco-friendly innovations. By applying these technologies from mid-sized to large vessels—leveraging the combined R&D and design capabilities of both companies—HHI seeks to lead the paradigm shift driven by environmental regulations, while reducing R&D risks, time, and costs.

In addition, HD KSOE, together with HHI, will establish a new overseas business entity within its shipbuilding division.

Scheduled to be established in Singapore this December, the new entity will serve as a regional hub overseeing overseas production sites such as HD Hyundai Vietnam Shipbuilding, HD Hyundai Heavy Industries Philippines, and HD Hyundai Vina (tentative name). It will manage overseas operations including new yard development and business cooperation. This move is aimed at regaining market share in the commercial ship sector—such as bulk carriers and tankers—where Korean shipbuilders are struggling against Chinese rivals. It also seeks to streamline decision-making processes to accelerate overseas business expansion.

“This restructuring reflects our strategic vision to broaden markets and strengthen shipbuilding. With the launch of the consolidated entity, we will drive market expansion and secure unrivaled technologies to lead the future shipbuilding industry,” an HD KSOE official noted.

Meanwhile, the merger will be carried out by issuing new HHI shares to the shareholders of HMD, the company being absorbed.

In related news, South Korea recently pledged $150 billion into a dedicated United States shipbuilding rejuvenation fund, as part of a much larger, $350 billion bilateral trade agreement with Washington.

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According to the South Korean government, the deal will aim to breathe new life into the American vessel construction industry, in return for a lower tariff rate of 15%. Prior to this, President Donald Trump’s administration had plans to impose 25% “reciprocal” tariffs on Korean imports. The latest deal is also expected to help the East Asian nation compete in the US market with neighbouring Japan—the world’s third biggest shipbuilder—and the European Union.