Hanwha to Acquire 12% Stake in KAI by Year-End, Strengthening Management Control

Hanwha Group plans to secure approximately 12% of the shares in Korea Aerospace Industries (KAI) by the end of the year, enhancing its strategic partnership. This shift from a simple investment to active management participation indicates a strong intent to gain control over KAI. The focus is on building a cooperative framework that spans defense and aerospace industries to bolster global competitiveness.

According to the Financial Supervisory Service's electronic disclosure system on June 16, Hanwha Group has increased its stake in KAI to a total of 9.04%. This follows Hanwha Aerospace's acquisition of 6.50% of KAI shares and Hanwha Systems' investment of 125 billion won to raise its stake by 1.53%.

Previously, Hanwha Aerospace announced last month that it would invest 500 billion won to acquire additional shares in KAI by year-end, achieving this goal ahead of schedule. As a result, Hanwha Group has become the second-largest shareholder in KAI, following the Export-Import Bank of Korea, which holds 26.41%.

Moreover, by the end of the year, Hanwha Group's stake in KAI is expected to exceed 12%. Hanwha Aerospace's board of directors has resolved to invest an additional 500 billion won to increase its stake to 9.97% by year-end.

Hanwha stated, "If necessary, we will participate in KAI's decision-making process and review related matters in accordance with legal procedures, considering the interests of the company, shareholders, and stakeholders to align with management objectives."

Industry analysts interpret Hanwha's recent shift in its purpose for holding KAI shares from mere investment to active management participation as a clear indication of its intent to secure control over KAI.

The rationale behind Hanwha's acquisition of KAI shares is to enhance global competitiveness. With over 30 years of achievements in fields such as aircraft engines, avionics, radar, satellites, space launch vehicles, and ground systems, Hanwha aims to create strategic cooperation with KAI, the only domestic manufacturer of complete aircraft, to generate synergies in the global aerospace market. Securing control over KAI would enable Hanwha to establish the largest value chain in the domestic space industry.

Currently, the domestic aerospace market is limited in scale, with multiple companies making overlapping investments, which restricts development and operational competitiveness. The combination of both companies' capabilities is expected to eliminate these inefficiencies while enhancing national competitiveness.

Consequently, the Export-Import Bank, as the largest shareholder, is likely to face increasing challenges. Given that KAI operates under a quasi-governmental structure, attention is focused on how it will balance management stability, defense sovereignty, and industrial competitiveness. Industry observers suggest that discussions regarding the acquisition of KAI's management rights may intensify in the future.