Hanwha raises KAI stake above 15%, accelerating aerospace and defense push

The Hanwha Building in Janggyo-dong, Seoul. [Hanwha]

Hanwha Group has raised its stake in Korea Aerospace Industries to 15.89%, stepping up efforts to strengthen global competitiveness and build an integrated ecosystem in the space, aviation and defense sectors.

Hanwha Systems said Monday it had purchased an additional 3.45% stake in KAI on the open market over the past month. The combined Hanwha Group holding now stands at 15.89%, comprising 9.90% held by Hanwha Aerospace, 4.98% by Hanwha Systems and 1.01% by Hanwha Aerospace USA.

Having acquired more than 15 percent of the shares in the listed company, Hanwha plans to file for a business combination review with the Korea Fair Trade Commission. The Export-Import Bank of Korea remains KAI's largest shareholder with a 26.41 percent stake.

As KAI's second-largest shareholder, Hanwha is also considering ways to participate in KAI's decision-making on matters including business cooperation between the two companies, synergy creation and support for expanding global exports.

Building an integrated space, aviation and defense platform

Hanwha said it expanded its KAI stake to secure space sovereignty and self-reliant national defense, and to strengthen export competitiveness and ecosystem development in the space, aviation and defense sectors.

The group also plans to compete against major global defense companies while adapting to a future battlefield environment shaped by unmanned and intelligent systems, as well as regional protectionism such as Europe's defense bloc formation.

Hanwha sees it as essential to emerge as a national champion with an integrated land, sea, air and space solution, particularly as the industry transitions to a private-sector-led New Space era and the global defense industry undergoes a broad realignment.

Hanwha brings technology and manufacturing capabilities spanning aircraft engines, guided weapons, radar, satellites, and land and naval defense systems, while KAI contributes systems-integration expertise across fighter jets, helicopters and unmanned aerial vehicles. Together, the two companies could build a comprehensive space, aviation and defense platform.

KAI is expected to sharpen its export competitiveness by leveraging Hanwha's overseas networks and integrated package offerings.

Kim Dong-kwan, senior vice chairman of Hanwha Group, presents the group's investment plan at a national briefing on advanced industry development in the Yeongnam region, held in Jinju, South Gyeongsang Province, on July 3 under President Lee Jae Myung. [Yonhap]

Hanwha to invest W55tr in 'AI space power' drive by 2040

Hanwha Group recently unveiled a mid-to-long-term "AI space power" strategy worth 55 trillion won ($38.7 billion). The plan calls for investing that amount through 2040 to develop an independent launch vehicle and satellites, an AI data center for space, a low-earth-orbit communications network and a defense AI data center, establishing an integrated space and defense infrastructure.

Kim Dong-kwan, senior vice chairman of Hanwha Group, said at the strategy presentation in Jinju, South Gyeongsang Province, in July that "South Korea must no longer view space and aviation as separate industries," adding that "only when space, aviation, AI and defense are connected as one can we truly leap forward as an AI space power."

Hanwha intends to lead the development of a southern aerospace belt linking Changwon in South Gyeongsang Province, home to Hanwha Aerospace, with Sacheon, where KAI is based, and Goheung in South Jeolla Province, site of the Naro Space Center. The group plans to build out the aerospace industry ecosystem by nurturing local talent, raising the technological competitiveness of partner companies, and fostering the joint growth of startups and research institutions.

keg@heraldcorp.com