Hanwha Group has decided to raise the tender offer price for shares of Singapore-based floating offshore equipment manufacturer Dyna-Mac Holdings  to S$0.67 per share. This decision comes just a month after initially launching a tender offer at S$0.60 per share through a local special purpose company in Singapore starting from Sept. 11.

The increased offer price represents a premium of 11.7% over the initial tender offer and 35.4% over the closing price of S$0.495 on the day before the previous tender offer. Hanwha Group announced that it would not further increase the price in the future.

For Hanwha Group to succeed in the tender offer, it must secure more than 50% of Dyna-Mac’s shares and obtain approval from the Singapore competition authorities. As of now, Hanwha Aerospace and Hanwha Ocean have already invested 115.8 billion won to secure a 24.0% stake in Dyna-Mac.

If Hanwha Group successfully acquires management rights in Dyna-Mac, Hanwha Ocean is expected to effectively respond to the rapidly changing global market environment through a multi-yard strategy that expands its production base in the offshore business sector.

Hanwha Group, one of South Korea’s largest conglomerates, has diversified business interests ranging from chemicals and materials to aerospace and defense. This acquisition aligns with Hanwha’s strategic objectives to enhance its industrial footprint and capabilities in the offshore equipment market. Dyna-Mac specializes in the fabrication and assembly of topside modules for floating production storage and offloading (FPSO) vessels and other offshore structures, making it a valuable asset for Hanwha’s expansion plans.

Acquisitions involving significant stakes in companies often require approval from competition authorities to ensure they do not create monopolistic conditions. Hanwha Group must navigate Singapore’s regulatory framework for mergers and acquisitions to complete this transaction.

The global offshore equipment market, including FPSO vessels, is integral to the oil and gas industry. Current trends, challenges, and opportunities in this market underscore the importance of Hanwha Ocean’s multi-yard strategy, which involves utilizing multiple shipyards or fabrication facilities to enhance production capacity and flexibility. This strategy offers benefits such as risk diversification and increased efficiency, making the acquisition of Dyna-Mac a strategic move for Hanwha Group.

Source:Business Korea