S. Korea’s Hanwha to acquire Philly Shipyard for $100 million

(PHILADELPHIA) — Hanwha Systems and Hanwha Ocean have announced the acquisition of Philly Shipyard, a leading U.S. shipbuilder that has delivered approximately half of the large U.S. Jones Act commercial ships in the United States since 2000. Hanwha Systems and Hanwha Ocean will together invest $100 million in the deal to further their strategies to expand their global defense and shipbuilding activities.

Philly Shipyard is a public company controlled by Aker ASA, a Norwegian industrial investment company with ownership interests in energy, green technologies, and marine biotechnology. Philly Shipyard produces vessels that are compliant with the Jones Act, a federal law that requires vessels used in domestic trade to be built in U.S. shipyards. Established in 1997, Philly Shipyard supplies around 50 percent of the largest U.S. commercial vessels, including tankers and containerships. In addition, Philly Shipyard constructs training vessels for the U.S. Maritime Administration (MarAd).

“The opportunity to collaborate with Philly Shipyard, a significant shipbuilder with a storied history, is an exciting strategic opportunity that will allow Hanwha Systems to deploy its state-of-the-art naval systems and associated technologies in the U.S. market,” said Sung-Chul Eoh, CEO of Hanwha Systems.

Hanwha Systems photo

“We look forward to leveraging our shipbuilding and manufacturing know-how in continuing the success of Philly Shipyard as it meets the expanding needs of the U.S. for decades to come,” added Hyek Woong Kwon, CEO of Hanwha Ocean.

Hanwha Systems is one of the leading defense companies in South Korea, developing technologies for unmanned maritime systems, naval radars, and sensors for manned and unmanned teaming (MUM-T) operations. Hanwha Systems is eager to produce vessels in the commercial market and take advantage of opportunities in the unmanned underwater vehicles (UUVs), Smart Ship, and unmanned surface vehicles (USV) markets. Hanwha Ocean, a world-class shipbuilder pioneering the global marine defense market, has a full suite of low-carbon, high-tech vessels ranging from ammonia and LNG carriers to destroyers, submarines and frigates.

Hanwha Systems and Hanwha Ocean see this acquisition as part of a long-term investment strategy that will bring best practices and leading technologies to complement existing Philly Shipyard capabilities.

“After two decades of stewardship, it is with great honor that we transition the ownership from Aker to Hanwha. Recognized as a global leader, Hanwha brings a wealth of sophisticated shipbuilding experience that will enable Philly Shipyard to realize a grander vision for its employees and customers. Reflecting on the past 17 years, I am personally grateful for the opportunity to have worked side by side the people of Philly Shipyard and eagerly anticipate witnessing the shipyard’s continued growth and success in the future,” said Kristian Rokke, chairman of Philly Shipyard ASA.

The shipyard was built following the 1996 closure of the former U.S. Navy Philadelphia Naval Shipyard and specializes in building Jones Act ships – vessels that meet the requirement of the 1920 law that requires American-built and flagged ships to move goods inside the United States.

The yard currently employs about 1,500 shipyard workers and currently has five ships under construction and three more under contract, company spokeswoman Kelly Whitaker told USNI News.

Among the ships, Philly Shipyard was contracted to build five national security multi-mission vessels (NSMVs) for MarAd. The NSMVs will serve as training vessels for U.S. maritime schools. The yard delivered the first, Empire State VII for SUNY Maritime College, last year. Patriot State II for Massachusetts Maritime Academy is set to deliver this year.

The NSMVs, authorized by Congress in 2016, have been praised for the speed of development and construction outside the normal federal acquisition process.

The sale of the yard, pending regulatory approval, is expected to close by the end of the year.

Formerly known as Daewoo Shipbuilding & Marine Engineering, Hanwah is one of the three big shipbuilders in South Korea along with Samsung Heavy Industries and Hyundai. Established in 2000, Hanwah has built a variety of commercial and naval ships for foreign and domestic markets.

In naval construction, the South Korean yard has built the export variant of the German Type-212A diesel-electric attack submarines for the Republic of Korea Navy, the KSS-III diesel-electric for the RoKN along with Hyundai and a variety of surface combatants for South Korea. Hanwah also built five Tide-class fleet oilers for the U.K. Royal Fleet Auxiliary.

Previous to the current deal, Hanwha had made an offer to buy the Australian-owned Austal USA yard in Mobile, Ala., for $662 million. That deal was scuttled, in part, due to national security concerns over Korean ownership of the yard that is becoming more involved in U.S. submarine construction.

The first reports of Hanwah’s interest in buying Philly Shipyard came in October when Korean press reported an inspection team was sent form Korea to the U.S. Earlier in 2023, local press reported Hanwah wanted to purchase a U.S. shipyard to build liquid natural gas tankers, vessels to support offshore wind farms and unspecified U.S. defense work.



By Professional Mariner Staff