POSCO Holdings has initiated formal steps to acquire a controlling stake in HMM Co. worth approximately 7 trillion won ($5 billion), marking the South Korean steel giant’s first major foray into the shipping industry as it seeks growth beyond traditional metals and battery materials.
The Pohang-based conglomerate recently engaged Samil PwC and Boston Consulting Group as advisors to evaluate HMM’s business potential, according to investment banking sources. POSCO is targeting shares held by Korea Development Bank, which owns a 36.02% stake in the container carrier.
The move comes after poultry processor Harim Co. abandoned a similar $5 billion deal in early 2024, reportedly due to disagreements over post-acquisition management control. Government creditors, who rescued HMM from bankruptcy in 2016, have been seeking to privatize the shipping company since it returned to profitability during the pandemic freight boom.
POSCO views HMM as a potential hedge against cyclical downturns in steel and secondary battery sectors, where Chinese oversupply and U.S. trade tensions have pressured margins. The steel company ships approximately 160 million tons of raw materials and products annually, suggesting potential logistics synergies.
However, the acquisition faces headwinds from softening container rates and HMM’s complex ownership structure, which includes convertible bonds that could inflate the government’s stake to 74% if exercised.
