Hanwha Group is pushing to acquire Poongsan's ammunition division with the goal of defense industry synergy.
On the 3rd, according to the defense industry and others, Hanwha Aerospace took part in the private bidding for Poongsan's ammunition division and is said to have submitted a final bid proposal.
Poongsan is effectively the only company that supplies the main ammunition used by the South Korean military—from 5.56㎜ small-caliber rounds to 155㎜ howitzer shells—under an integrated production system (a system that organically connects product development and design through manufacturing, inspection, and shipment).
Hanwha Aerospace produces K9 self-propelled howitzers and exports many overseas. In particular, over the past several years, demand has risen for 155㎜ shells for self-propelled howitzers due to the Russia-Ukraine war and other factors. This is a point where synergy with Poongsan's ammunition division is expected.
Under the Defense Business Act, a defense company must first obtain approval from the Ministry of Trade, Industry and Resources (the ministry) for a sale or acquisition. The authority to designate defense companies lies with the Minister of the ministry. Afterward, the ministry confirms the views of the Defense Acquisition Program Administration and then decides on the final approval.
This procedure will proceed if Hanwha Aerospace is selected as the preferred bidder.