Hanwha to acquire Philly Shipyard

Image: Philly Shipyard

In deal that was first reported as in the works last October, Philly Shipyard is to be acquired by Korea’s Hanwha Group, whose Hanwha Ocean is the former the former Daewoo Shipbuilding & Marine Engineering.

In a stock exchange announcement today Oslo-listed Philly Shipyard ASA reports that has entered into a share purchase agreement with both Hanwha Systems and Hanwha Ocean for the purchase of its sole operating subsidiary Philly Shipyard, Inc. (PSI).

The transaction will result in the Philly Shipyard ASA selling all of its business against receiving a cash consideration of $100 million (the “Purchase Price”), corresponding to a value per share of NOK 87.24 (based on an USD/NOK exchange rate of 10.5628 and 12,574,766 shares outstanding, adjusted for 466,865 treasury shares).

“After two decades of stewardship, it is with great honor that we transition the ownership from Aker to Hanwha,” said Kristian Røkke, chairman of Philly Shipyard ASA. “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 with the people of Philly Shipyard and eagerly anticipate witnessing the shipyard’s continued growth and success in the future. From a financial perspective, the combination of $150 million in dividends since 2014 and sales price of $100 million, offers shareholders an attractive value creation journey.”

The stock exchange announcement says the transaction is subject to the satisfaction of certain customary conditions, including approval by CFIUS (Committee of Foreign Investments in the U.S.) and other regulatory approvals being obtained as well as no material adverse event having occurred in relation to PSI. Subject to satisfaction of all closing conditions, the parties expect that the transaction will close during fourth quarter 2024.

In the event of cost overruns in excess of $100 million in current projects undertaken by PSI compared to the company’s current estimates, the parties have agreed principles to reduce the payable purchase price at closing. Except for certain transaction costs, the purchase price is not subject to any other adjustments