Hanwha shareholders back split that sharpens succession map

Shareholders of Hanwha Corp., the holding company of South Korea's seventh-largest conglomerate, approved a plan to divide the company in two, a move that reorganizes ownership across the founding family and points more clearly toward the group's next leader.

The proposal passed with 99.9 percent support of the shares represented at an extraordinary shareholders' meeting held Wednesday in Seoul, the company said. The vote followed the board's approval of the spin-off in January.

Under the plan, the existing Hanwha Corp. will remain the group's central holding entity overseeing its core defense, shipbuilding, energy and financial businesses. Its major affiliates include Hanwha Aerospace, Hanwha Ocean and Hanwha Solutions, overseen by Vice Chair Kim Dong-kwan, along with financial units such as Hanwha Life Insurance led by second son Kim Dong-won.

A newly created firm, Hanwha Machinery & Service Holdings, will manage the group's machinery, technology and lifestyle affiliates, including Hanwha Vision, Hanwha Hotel & Resort, Hanwha Galleria, Hanwha Momentum, Hanwha Robotics and food service operator Ourhome. Those businesses fall under youngest son Kim Dong-seon.

The restructuring gives the third-generation heirs of Chairman Kim Seung-youn clearer control over their respective domains while cementing Kim Dong-kwan, the eldest son, as the likely successor to lead the conglomerate. Analysts say the reorganization also simplifies Hanwha's sprawling portfolio and defines each brother's operational responsibilities.

Existing shareholders will receive stock in both companies at a split ratio of about 0.756 for the existing entity and 0.244 for the new one, based on their net asset book values. A holder of 100 shares would receive roughly 76 shares in the surviving company and 24 in the new one.

The split takes effect Aug. 1, with the relisting of Hanwha Corp. and the initial listing of the new company scheduled for Aug. 25. "The split will enable us to further strengthen the expertise and competitiveness of each business," Hanwha Corp. CEO Kim Woo-seok told the meeting, adding that the move aims to lift long-term corporate and shareholder value.