STX Heavy Industries' buyer has been decided! A South Korean shipbuilding giant gets a new boost.

After Hanwha Group's withdrawal, Korea Shipbuilding & Offshore Engineering's acquisition of STX Engine has become a certainty, adding new momentum for HD Hyundai Group, which owns HHI-EMD, the world's largest marine engine manufacturer, to enter the eco-friendly vessel market.

On March 2nd, the official bidding for the sale of shares in South Korean marine engine manufacturer STX Engine began, with Korea Shipbuilding & Offshore Engineering, the shipbuilding business holding company of HD Hyundai Group (formerly Hyundai Heavy Industries Group), being the sole participant in the official bid. This means that Korea Shipbuilding & Offshore Engineering has naturally been selected as the preferred negotiating partner for the sale of STX Engine shares.

Last December, 4 to 5 companies, including Korea Shipbuilding & Offshore Engineering, South Korean defense giant Hanwha Group, and South Korean private equity fund (PEF) operating company Socius, participated in the preliminary bidding for the sale of STX Engine shares. The acquisition target is the 47.81% stake in STX Engine held by South Korean private equity fund operating company PineTree Partners, with an estimated acquisition amount of 100 billion Korean Won (approximately 79 million US dollars). After conducting on-site due diligence on STX Engine, the companies that participated in the preliminary bidding will select the preferred negotiating partner for the sale of STX Engine shares through official bidding in the first quarter of this year and complete the signing of the stock purchase agreement (SPA) with PineTree Partners. Upon completion of the acquisition, they will become the largest shareholder of STX Engine.

According to relevant sources in the South Korean industry, although companies such as Hanwha Group and Socius also expressed acquisition interest during the previous preliminary bidding and on-site due diligence stages, making the competition for this acquisition a chaotic scramble, ultimately no other companies participated in the official bidding except for Korea Shipbuilding & Offshore Engineering. This means that Korea Shipbuilding & Offshore Engineering has effectively been confirmed as the acquirer of STX Engine.

It is reported that Hanwha Group once showed great interest in acquiring STX Engine, but after signing a Memorandum of Understanding (MOU) on February 16th this year to acquire a 33% stake in South Korean marine engine manufacturer HSD Engine (formerly Doosan Engine), it decided to withdraw from the official bidding for the sale of STX Engine shares.

STX Engine has certain advantages in areas such as marine diesel engines, DF dual-fuel engines, LNG engines, and LPG engines. If Korea Shipbuilding & Offshore Engineering successfully acquires STX Engine, its three shipbuilding subsidiaries – Hyundai Heavy Industries, Hyundai Samho Heavy Industries, and Hyundai Mipo Dockyard – will generate synergy with the engine business.

It is reported that Korea Shipbuilding & Offshore Engineering's acquisition of STX Engine aims to combine the engine technology owned by Hyundai Heavy Industries Engine & Machinery Division (HHI-EMD) with that of STX Engine, enriching the product range of small and medium-sized engines, providing customers with diversified product choices, and generating synergy with HD Hyundai Group's shipbuilding business to further enhance overall competitiveness.

HHI-EMD is the world's largest marine engine manufacturer, primarily producing large and medium-sized marine engines. It is the global leader in terms of marine main engine deliveries and total power, with its sales accounting for 17% of Hyundai Heavy Industries, second only to the shipbuilding and offshore business division, which accounts for 77% of sales.

       According to International Shipnet, STX Engine is a subsidiary of the former STX Group, established in February 2004, primarily engaged in marine engines, land-based power generation engines, and marine equipment supply businesses. After the dissolution of STX Group, STX Engine entered restructuring procedures in August 2016.

In March 2018, STX Engine selected South Korean private equity fund (PEF) operating company PineTree Partners and GlobalSeAH as preferred bidders, respectively. Subsequently, PineTree Partners acquired its main engine parts and components business unit for 98.7 billion Korean Won (approximately 92.6 million US dollars). Additionally, GlobalSeAH acquired STX Engine's platform business unit for 16.1 billion Korean Won (approximately 15 million US dollars).

Four years after acquiring STX Engine's main engine parts and components business unit, PineTree Partners decided to sell its management rights shares. It is reported that Pinetree Partners will sell 47.81% of STX Engine's shares and has appointed Samjung KPMG as the lead manager for the sale of STX Engine shares.

With the recovery of the shipbuilding market in recent years, STX Engine's financial structure is improving. Since incurring large deficits in 2018, STX Engine has been operating at a loss except for 2020; however, since the beginning of 2022, STX Engine has achieved profitability for three consecutive quarters. At the end of the third quarter last year, the company's orders in the engine equipment sector increased by 16% year-on-year. Last November, STX Engine also signed a contract with a Chinese shipbuilding company to supply marine engines worth 13.9 billion Korean Won (approximately 10 million US dollars). At the same time, STX Engine is also researching and discussing the construction of facilities capable of producing newly developed eco-friendly engines.
      
Korea Shipbuilding & Offshore Engineering stated that the acquisition of STX Engine is to further expand marine engine production capacity. A company official said: "This is a strategic move to effectively respond to the growing demand for marine engines. After a successful acquisition, combining the engine technology owned by Hyundai Heavy Industries with that of STX Engine will not only promote the diversification of small and medium-sized engine products but also generate synergy with HD Hyundai Group's shipbuilding business, further enhancing overall competitiveness."}]}``` योग्य JSON आउटपुट:{