Hanwha Completes $100 Million Acquisition of Philly Shipyard

South Korea’s Hanwha Group completed the acquisition of Philly Shipyard on December 19 in a deal valued at approximately $100 million. The company emphasized its plans for the growth of the yard’s operations and has openly spoken of its goal to use the yard to expand into U.S. naval defense contracting.

Hanwha reported it received approval from the Committee on Foreign Invest in the United States in September 2024 as the clearance for it to acquire the yard from Philly Shipyard ASA, a publicly traded Norwegian company that was majority-owned by Aker ASA. The transaction was jointly conducted by Hanwha Systems, the group’s defense electronics operation, and Hanwha Ocean its shipbuilding operation formed after the acquisition of Daewoo Shipbuilding & Marine Engineering in 2023.

Earlier this week, Hanwha Systems reported it was conducting a rights offering valued at approximately $63 million for a special purpose U.S. corporation for the acquisition. It used approximately $59 million to fund the acquisition of the U.S. shipyard while it retained nearly $4 million for operating expenses.

The shipyard was founded in 1997 at the site of the former U.S. Navy Philadelphia Shipyard. It is being renamed Hanwha Philly Shipyard and David Kim was named CEO of the shipyard. Kim previously served as executive vice president of Hanwha Defense USA.

"Hanwha Philly Shipyard begins an exciting new chapter today," said Kim. "We plan to grow and build on a long tradition of success, by expanding production using advanced technologies and supporting the national revitalization of U.S. shipyards. Together, we begin working toward our vision for Hanwha Philly Shipyard to be a trusted U.S. shipbuilder, challenging and redefining sustainable maritime solutions for commercial and government clients. We intend to do that by pushing the boundaries of shipbuilding by combining people with technology to build best-in-class vessels."

The company said it plans to expand the yard’s capabilities and scale into new markets while building on the current operations. They pointed to its experience of operating one of the world’s largest shipyards on Goeje Island, Korea while saying the plan is to expand Philly into more commercial shipbuilding and defense. Recently the Korean shipyard has received its first two maintenance assignments from the U.S. Navy. 

They also highlighted Hanwha Systems’ role as a leading supplier of naval systems. Previously discussing the strategy for growth in the U.S. market, Hanwha cited the opportunities to build components for the U.S. newbuild programs as a first step in its strategy. 

Hanwha has been working to expand its relationship with the U.S. Navy including earlier this year hosting U.S. Secretary of the Navy Carlos Del Toro at the Korean shipyard. This fall, they also provided a tour of the South Korean shipyard to Admiral Steve Koehler, Commander of the U.S. Pacific Fleet, and a tour of its R&D facilities for U.S. Navy NAVSEA (Naval Sea Systems Command) Rear Admiral Thomas Anderson and Rear Admiral William Green.

Philly Shipyard reports it has built 50 percent of the large, ocean-going Jones Act vessels in the U.S. since 2000. This includes containerships for Matson and oil tankers. Currently, it is building the MARAD training ships for the U.S. state maritime schools and a rock installation vessel for the offshore wind sector. Work recently began on the first of a series of new orders from Matson for LNG-fueled containerships.

The agreement to acquire Philly Shipyard from the Norwegian companies was reached in June 2024. Talks had been rumored in October 2023, but Philly was also being courted by HD Hyundai which announced a partnership in April 2024 with the yard. Philly had worked with the Koreans in the past, including design and engineering work with DSEC, which was part of DSME, and DSEC also built components for Philly including those incorporated into the MARAD vessels.