Three of South Korea's largest aerospace manufacturers, Daewoo Heavy Industries (DHI), Hyundai Space & Aircraft and Samsung Aerospace, have agreed in principle to merge their businesses into a single entity as part of wider corporate consolidation move.
South Korea's five major corporate conglomerates, or chaebols, have announced plans to rationalise competing business interests across seven separate industrial sectors. The agreement includes a memorandum of understanding to form a single joint Korean aerospace company.
The three companies have initially agreed to equal shareholdings, until a mechanism can be agreed to assess the value of contributed assets, which could then be balanced out by the injection of cash. The country's second largest player, Korean Air Aerospace, has elected for now not to join the new company (Flight International, 26 August-1 September).
South Korea's Ministry of Industry and Energy has also indicated its willingness to participate in the creation of the new aerospace entity. This is likely to take the form of converting debt owed by DHI, Hyundai and Samsung into state equity, which could then be sold at a later date, possibly to a foreign investor, say local sources.
Source: Flight International
