Hanwha Group to acquire HSD Engine

The deal to acquire a 33% stake in HSD Engine was announced on 16 February 2023. 

The Korean conglomerate added that it planned to begin due diligence before signing a follow-on agreement to fully acquire the engine builder in April 2023. The Korean group noted that it aimed to conclude the due diligence and receive regulatory approvals in the first half of 2023, before concluding the acquisition in the second half of 2023. 

The deal will create a vertically integrated manufacturing group. Hanwha Group acquired the Korean shipyard Daewoo Shipbuilding & Marine Engineering (DSME) in 2022. 

The vertical integration offered specific advantages in the area of producing engines capable of operating on alternative fuels. Hanwha’s subsidiaries PSM and Thomassen have expertise in hydrogen injection and combustion in the stationary gas turbine market. The company noted that by combining this expertise with the engine manufacturing capabilities of HSD engines, the company will begin producing engines that use eco-friendly fuels such as ammonia and hydrogen. 

HSD Engine has existing experience with the development of engines capable of operating on methanol. HSD Engine signed a joint development project with WinGD in September 2022 to deliver an engine capable of running on methanol by 2024. 

The deal is also expected to strengthen DSME’s project delivery and cost management competences, and extend vessel maintenance capabilities. 

In a statement, a Hanwha official commented, “We plan to continue investing in future growth engines and core competencies by combining HSD engine manufacturing technology with Daewoo Shipbuilding & Marine to strengthen high-value-added businesses such as eco-friendly engine ship manufacturing, and create synergies through collaboration with various affiliates.”