President Lee Jae Myung speaks during an event to celebrate the first delivery of the KF-21 figher jet produced by Korea Aerospace Industries at the firm's headquarters in Sacheon, South Gyeongsang Province, March 25. Joint Press Corps-Yonhap
Hanwha Aerospace’s latest acquisition of a stake in Korea Aerospace Industries (KAI) is emerging as a strategic blow to LIG Defense & Aerospace (D&A), potentially undermining the latter’s prospects in any future bid in the state-controlled aerospace firm.
The Hanwha affiliate purchased Monday additional 100,000 KAI shares — equivalent to a 0.1 percent stake. Combined with the 4.99 percent stake secured in March through other affiliates, including Hanwha Systems, Hanwha’s total ownership in KAI has risen to 5.09 percent.
Crossing the 5 percent threshold carries regulatory implications, prompting Hanwha to revise its stated investment purpose from “simple investment” to “participation in management.”
The company also signaled plans to acquire additional KAI shares worth 500 billion won ($338 million) by the end of this year, which could lift its stake to around 8 percent.
The move is widely interpreted as more than a financial investment.
Industry officials see it as a calculated step toward strengthening Hanwha’s position across the aerospace, defense and space value chain, with potential mergers and acquisitions in mind.
By combining Hanwha’s strengths in aircraft engines, launch vehicles, satellites and radar systems with KAI’s capabilities in aircraft manufacturing and satellite platforms, the group could evolve into a “full-stack” aerospace player.
In 2018, Hanwha Aerospace sold all of its 5.99 percent stake in KAI, but recently renewed its investment, as the strategic importance of the aerospace and defense industries has grown here and abroad. The rosy defense outlook also boosted the Hanwha affiliate's stock growth by around 70 percent for the past year.
Against this backdrop, Hanwha’s growing stake in KAI is seen as a preemptive move that could deter or complicate competing bids — particularly from LIG D&A, which has long been viewed as another strong contender for a potential KAI acquisition.
Source: Korea Times News
