Kim Seung-yeon, chairman of Hanwha Group, has begun the succession process for Hanwha Group by donating half of his 22.65% stake in Hanwha Corporation to his three children, Kim Dong-kwan, Kim Dong-won, and Kim Dong-sun. Kim's equity will be allocated as follows: Kim Dong-kwan, vice chairman of Hanwha Group, will receive 4.86%, while Kim Dong-won, president of Hanwha Life, and Kim Dong-sun, vice president of Hanwha Galleria, will each receive 3.23%. Industry insiders predict that after the initial public offering (IPO) of Hanwha Energy, which is fully owned by the three siblings, a merger with Hanwha Corporation will occur, followed by a spin-off.
With the equity transfer from Kim, the largest shareholder of Hanwha Corporation, which acts as the group's holding company, has become Hanwha Energy (22.16%). It is followed by Kim Seung-yeon (11.33%), Kim Dong-kwan (9.77%), Kim Dong-won (5.37%), and Kim Dong-sun (5.37%). Including the equity of Hanwha Energy, the 'Hanwha three brothers' collectively hold 42.67%.
Currently, the three brothers are exerting influence over the group through a structure of 'Hanwha Energy → Hanwha Corporation → Hanwha affiliates.' Industry experts anticipate that Hanwha Energy will merge with Hanwha Corporation after enhancing its corporate value. Hanwha Energy has raised cash in the thousands of billions of won by transferring its stake in Hanwha Ocean to Hanwha Aerospace and is expected to acquire or invest in promising companies to increase its corporate value.
The final stage of the succession process is expected to involve the partitioning of Hanwha Corporation. In this scenario, shareholders of the spun-off company will be allocated shares of the newly established company proportionally. It is likely that Kim Dong-kwan will oversee defense, shipbuilding, and energy sectors, Kim Dong-won will manage financial affiliates such as insurance and securities firms, and Kim Dong-sun will handle affiliates related to distribution, robotics, and semiconductor equipment. Following this, he could increase his ownership percentage in his assigned company by exchanging equities with his siblings.
Hanwha Group explained that the succession has been finalized as Kim's three children have become the largest shareholders of Hanwha Corporation. The group believes that it faced scrutiny from the Financial Supervisory Service due to perceptions that Hanwha Aerospace's 3.6 trillion won rights offering is connected to the succession of the three siblings.
A Hanwha Group official noted, "Chairman Kim Seung-yeon decided to transfer equity to quickly address unnecessary controversies and misunderstandings related to the management succession and to focus on core business activities." They added, "We expect to correct misunderstandings that the equity transfer intends to 'lower the corporate value of Hanwha Corporation for a merger with Hanwha Energy' and to alleviate concerns about harming shareholder value."
Earlier, Hanwha Aerospace faced criticism for spending 1.3 trillion won to acquire a 7.3% stake in Hanwha Ocean held by Hanwha Energy and Hanwha Impact, and then deciding on a 3.6 trillion won rights offering just a week later, citing a need for investment funds. This situation arose because it appeared that nearly all of their cash and cash equivalents (1.375 trillion won at the end of 2024) were being directed to the three siblings' companies, while they were reaching out to shareholders for additional funds.