Korea's HD KSOE to buy 35% stake in marine engine maker STX
HD Korea Shipbuilding & Offshore Engineering Co. (KSOE) is slated to acquire STX Heavy Industries Co. to launch large engines for small-to-mid-sized carriers, the shipbuilder said in a regulatory filing on Monday.
KSOE, the intermediate shipbuilding holding firm of South Korea’s HD Hyundai Co., said it has signed a deal to buy 6.5 million shares in STX from Seoul-based Pine Tree Partners LLC. The country’s major shipbuilder will also acquire 5.5 million new shares in STX, securing a combined 35% stake in the marine engine maker at 81.3 billion won ($65.1 million).
KSOE joined the race to acquire STX last December, alongside local engine maker HSD Engine Co. and an undisclosed overseas company.
KSOE is planning to make large engines for small-to-mid-sized ships. It exports HiMSEN, mid-sized engines for large ships, to about 40 countries. The company and its Saudi Arabian joint venture began building a plant in the Middle East country in June to start overseas manufacturing of the engines.
Engines typically account for 5%-10% of construction cost of ships.
STX specializes in manufacturing low-speed marine diesel engines, as well as dual fuel engines for liquefied natural gas carriers. The company produces engines by using licenses from Germany’s MAN Energy Solutions SE.
KSOE will leave STX’s management independent and support its eco-friendly marine engine technology development, in a positive outlook for LNG dual fuel engines for small-to-mid-sized carriers.
The shipbuilder said it will also strengthen each production line of STX to enhance manufacturing efficiency, step up localization of major engine parts as well as increase market share in overseas countries like China.
