Norwegian-owned Philly Shipyard in Philadelphia, Pennsylvania, has entered into a share-purchase agreement with South Korean defense contractor Hanwha Systems and its shipbuilding affiliate Hanwha Ocean. The $100 million deal, announced on Thursday, marks a significant milestone in integrating advanced Korean shipbuilding technology into the U.S. market.
Philly Shipyard, a historic commercial shipyard located on the former Philadelphia Naval Shipyard site, boasts a rich history dating back to 1801. At its peak during World War II, the shipyard constructed 53 warships and employed 40,000 people. However, it closed in 1996 following the Cold War’s end and a decrease in shipbuilding demand. The last ship constructed at the facility was the USS Blue Ridge, the flagship of the U.S. 7th Fleet.
The acquisition comes amid renewed efforts to rebuild America’s shipbuilding capacity as China surpasses the U.S. in the number of naval vessels. U.S. Secretary of the Navy Carlos Del Toro has advocated for integrating shipbuilding expertise from allies. Del Toro praised Hanwha’s acquisition, stating, “Hanwha’s acquisition of Philly Shipyard is a game-changing milestone.”
Kristian Rokke, chairman of Philly Shipyard ASA, highlighted Hanwha’s sophisticated shipbuilding experience, which he believes will “enable Philly Shipyard to realize a grander vision for its employees and customers.”
The transaction awaits approval from the Committee of Foreign Investments in the U.S. (CFIUS), chaired by Treasury Secretary Janet Yellen, to assess any national security implications. The deal is expected to close during the fourth quarter of 2024.
During a February visit to South Korea, Del Toro visited Hyundai Heavy Industries’ shipyard in Ulsan and Hanwha Ocean’s shipyard on Geoje Island, praising their level of digitization and real-time monitoring of shipbuilding progress.
Charlie Eoh, CEO of Hanwha Systems, expressed enthusiasm about the strategic opportunity, stating, “Collaborating with Philly Shipyard will allow Hanwha Systems to deploy its state-of-the-art naval systems and associated technologies in the U.S. market.”
Hanwha Ocean has a diverse portfolio of low-carbon, high-tech vessels, including ammonia and liquified natural gas carriers, destroyers, submarines, and frigates. The acquisition is seen as a long-term investment to bring best practices and leading technologies to enhance Philly Shipyard’s capabilities.
This strategic move signifies a robust collaboration between U.S. and Korean shipbuilding industries, aiming to strengthen and modernize the American shipbuilding landscape.
