Samil PwC said in its report on Feb. 13 that the domestic shipping industry can realize economies of scale through mergers and acquisitions (M&As) and discover new growth engines through business diversification.
According to the report, a total of 12 M&A deals worth 19.73 trillion won in total were signed in the global shipping industry last year.
By contrast, in the domestic shipping industry, Consus Asset Management’s investment in Polaris Shipping was the only investment deal last year. Consus Asset Management formed a consortium with Polar Energy & Marine, the largest shareholder in Polaris Shipping, and acquired the second-largest shareholders’ shares for 160 billion won. The asset management company planned to acquire shares from the largest shareholder as well, but its funding failed and it put its shares up for sale in just six months.
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“For the past five years, global shipping companies have focused on M&As for business expansion and diversification, that is, to cover land and air logistics and related businesses and services such as e-commerce and customs clearance,” Samil PwC said, adding, “On the other hand, M&As in the domestic shipping industry have been limited to PEF investment and acquisition of logistics companies.”
Yet, the report notes that the landscape of the domestic shipping industry could be changed through M&As as the government has begun the process of selling HMM, the largest shipping company in Korea with a value of 10 trillion won.
Source: Business Korea