Hanwha Corp will separate its defence, shipbuilding, energy and finance businesses from its tech and life operations. Hanwha's board on Tuesday approved a shareholder spin-off, it said. Defence, shipbuilding, marine, energy and finance will remain in the existing company, while the tech and life business will be split into a newly established company. The spin-off is expected to be completed in July following procedures including an extraordinary shareholders' meeting in June.

The newly established Hanwha Machinery & Service Holdings will include tech affiliates such as Hanwha Vision, Hanwha Momentum, Hanwha Semitec and Hanwha Robotics, and life affiliates such as Hanwha Galleria, Hanwha Hotel & Resort and Ourhome. The existing company will include Hanwha Aerospace, Hanwha Ocean, Hanwha Solution and Hanwha Life.

The split ratio was set at 76.3 percent for the existing company and 23.7 percent for the new company, based on book value of net assets. Existing shareholders will receive shares in the existing and new companies in line with the split ratio.

Hanwha expects the split to ease the conglomerate discount. The company said defence, shipbuilding, energy and finance, which require long-term investment, had been tied together with machinery and services, which require agile responses. It said this created mismatches in the speed and direction of strategy and made portfolio balance management difficult.

After the split, each company will be able to independently draw up management strategies suited to market conditions and make rapid decisions, it said. The existing company is expected to be re-rated by the market through a focus on core defence and shipbuilding businesses and stronger shareholder returns. The new company will be able to highlight growth potential in businesses that had been undervalued under an independent holding structure and make timely investment decisions.

In September 2024, Hanwha Aerospace spun off its non-defence business group into Hanwha Vision through a shareholder spin-off. Market capitalisation rose 35 percent three months after the split compared with just before the board resolution. In most shareholder spin-off cases over the past five years, including Samsung Biologics, SK D&D, Isu Chemical and EcoPro, market capitalisation also rose after the split.

It will pursue measures to boost shareholder value alongside the shareholder spin-off. It plans to cancel 4.45 million common shares, excluding employee performance compensation. That is 5.9 percent of all common shares and worth 456.2 billion won at market value, the largest since the launch of the new government.

It set the minimum dividend per share at 1,000 won, up 25 percent from 800 won last year. It said it would also consider increasing dividends, taking into account the growth of subsidiaries. It will acquire and cancel all 199,033 remaining old preferred shares through off-market purchases.

◆New holding company to foster growth in physical AI solutions

The new holding company will pursue strategic cooperation between the tech and life divisions to nurture the physical AI solutions business as a next-generation growth engine. It said it selected three core areas: smart F&B using AI technology, robots and automation facilities; smart hospitality applying smart monitoring systems; and smart logistics as an intelligent logistics system.

Hanwha Vision is accelerating its shift into a customer-focused solutions provider by advancing AI-based intelligence and cloud adoption as a global video security company. Hanwha Semitec is emerging as a rising force in TC bonders, production equipment for high-bandwidth memory, and is focusing on developing next-generation technologies such as hybrid bonders. Hanwha Momentum and Hanwha Robotics are upgrading their capabilities to become comprehensive automation platform providers based on automation solutions.

Hanwha Hotel & Resort has led Korea's leisure culture for more than 40 years and is expanding its business scope after recently launching the high-end resort brand Anto. Hanwha Galleria plans to cement its status as a premium department store through reconstruction of its luxury hall designed by Thomas Heatherwick. Ourhome is focusing its capabilities to become an F&B value chain solutions provider spanning product development, food ingredient supply, distribution and production.

It is also speeding up efforts to advance corporate governance. The existing company will proactively respond to business risks and establish long-term business strategies and investment plans, taking into account the nature of business groups with high policy sensitivity. It plans to strengthen transparent management by setting up an independent audit support department, establishing a CEO succession policy, and disclosing its dividend policy at least once a year.

A Hanwha official said the company plans to set key management indicators for boosting corporate value, including improving revenue growth and expanding shareholder returns, and to focus on strengthening trust with shareholders and investors following the announcement of its corporate value enhancement plan, including the shareholder spin-off.