By Diplomacy Journal Lee Kap-soo

HD Korea Shipbuilding & Offshore Engineering (HD KSOE) announced on Aug. 27 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 MASGA project is set to go into full swing.

On the 27th, HD KSOE, HD Hyundai Heavy Industries (HHI), and HD Hyundai Mipo (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.

China and Japan, Korea’s key competitors, have also recently completed mergers between their respective No. 1 and No. 2 shipbuilders to strengthen competitiveness.

The launch of HHI stands out as a merger between the world’s leading large and mid-sized shipbuilders, expected to significantly expand overall capacity and market reach.

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.

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.