Hanwha Aerospace will acquire additional equity in Korea Aerospace Industries (KAI) and formally take part in management.
Hanwha Aerospace said on the 4th that it acquired an additional 100,000 KAI shares (0.1%). Earlier, Hanwha Aerospace, together with subsidiaries including Hanwha Systems, disclosed in March that it had secured 4.99% equity in KAI. With this additional purchase, the equity in KAI secured by Hanwha Aerospace together with its subsidiaries has increased to 5.09%.
Including the amount purchased that day, Hanwha Aerospace plans to invest a total of 500 billion won to buy KAI shares by the end of the year. Based on the closing price on the 30th of last month (169,000 won), that corresponds to 2,958,580 shares (3.04%). Accordingly, Hanwha Aerospace's KAI equity is expected to increase to up to 8% by year-end.
As its equity stake exceeded 5%, Hanwha Aerospace changed the purpose of its KAI equity holding from "simple investment" to "management participation." A Hanwha Group representative said, "Specific plans for management participation are under review," adding, "If there is a need to participate in the decision-making process, as a shareholder we will, in accordance with lawful procedures and methods, fully take into account the circumstances and interests of the company, shareholders, and stakeholders so as to align with the company's management objectives."
Hanwha Group believes it is necessary to foster a large defense company integrating land, sea, air, and space. It said that to respond to the deepening of global conflicts such as the recent Middle East war and the Russia-Ukraine war, and to the battlefield environment becoming unmanned and intelligent, major foreign countries are already providing full support to large defense corporations.
In fact, Germany's Rheinmetall recently acquired a naval shipbuilding institutional sector and carried out a joint investment to develop next-generation laser weapons. France's Airbus and Thales, and Italy's Leonardo S.p.A.—the three companies—integrated their space businesses to counter SpaceX. The United Kingdom's BAE Systems plc and the United States' Northrop Grumman Group each acquired a corporation that manufactures satellites and a company with space launch vehicle technology.
A Hanwha Group representative said, "Given the reality of 'all-domain' operations involving satellites and data analysis (AI) revealed in the Middle East war, only a national champion corporation with greater scale can take the lead in global competition."
Hanwha Aerospace plans to expand its KAI equity to strengthen global export competitiveness in the defense and space aerospace sectors and to expand cooperation in future aerospace businesses based on a strategic partnership between the two companies. Hanwha Aerospace has competitiveness in areas such as ground defense, aircraft engines, avionics, radars, and space launch vehicles, while KAI is the only domestic complete aircraft developer and manufacturer and possesses technologies such as satellite development and air combat systems.
A Hanwha Group official said, "If the partnership between the two companies is strengthened, we can achieve more orders through a one-team strategy in the global defense and space aerospace markets," and added, "Based on Hanwha Group's experience in discovering future growth engines, preemptive investment, and know-how from overseas successes, we can also expect KAI's export competitiveness to improve."