An American shipyard that builds domestic cargo vessels and training ships for U.S. maritime colleges has agreed to a deal, in which it would be bought by a major South Korean shipbuilder.
Pending regulatory approvals, Philly Shipyard is set to be acquired by Hanwha Systems and Hanwha Ocean for $100 million from its Norwegian parent Anker ASA, according to a statement from the Philadelphia yard on Thursday.
“Recognized as a global leader, Hanwha brings a wealth of sophisticated shipbuilding experience that will enable Philly Shipyard to realize a grander vision for its employees and customers,” Kristian Røkke, chair of Philly Shipyard ASA, said in a Thursday statement.
The South Philadelphia shipyard was built following the 1996 closure of the former U.S. Navy Philadelphia Naval Shipyard and specializes in building Jones Act ships – vessels that meet the requirement of the 1920 law that requires American-built and flagged ships to move goods inside the United States.
The yard currently employs about 1,500 shipyard workers and currently has five ships under construction and three more under contract, company spokesperson Kelly Whitaker told USNI News.
Among the ships, Philly Shipyard was contracted to build five National Security Multi-Mission Vessels for the Marine Administration. The NSMVs are set to serve as training vessels for U.S. maritime schools. The yard delivered the first, Empire State VII built for the State University of New York Maritime College, last year. Patriot State II for the Massachusetts Maritime Academy is set to deliver this year.
The NSMVs, authorized by Congress in 2016, have been praised for the speed of development and construction outside the normal federal acquisition process.
The sale of the yard, pending approval, is expected to close by the end of the year.
Formerly known as Daewoo Shipbuilding & Marine Engineering, Hanwah is one of the three big shipbuilders in South Korea along with Samsung Heavy Industries and Hyundai. Established in 2000, Hanwah has built a variety of commercial and naval ships for foreign and domestic markets.
In naval construction, the South Korean yard has built the export variant of the German Type-212A diesel-electric attack submarines for the Republic of Korea Navy, the KSS-III diesel-electric for the RoKN along with Hyundai and a variety of surface combatants for South Korea. Hanwah also built five Tide-class fleet oilers for the U.K. Royal Fleet Auxiliary.
Previous to the current deal, Hanwha had made an offer to buy the Australian-owned Austal USA yard in Mobile, Ala., for $662 million. That deal was scuttled, in part, due to national security concerns over Korean ownership of the yard that is becoming more involved in U.S. submarine construction.
“Austal is a national asset and thus can only be sold to companies within the AUKUS alliance countries,” a Hanwha spokesperson told newswire Reuters in April.
The first reports of Hanwah’s interest in buying Philly Shipyard came in October when Korean press reported an inspection team was sent form Korea to the U.S. Earlier in 2023, local press reported Hanwah wanted to purchase a U.S. shipyard to build liquid natural gas tankers, vessels to support offshore wind farms and unspecified U.S. defense work.
Thursday’s announcement drew praise from Secretary of the Navy Carlos Del Toro, who visited Korean shipbuilders – including Hanwah – in February and has encouraged foreign investment in the U.S. shipbuilding industry to spur competition with existing U.S. naval yards.
“Knowing how they will change the competitive U.S. shipbuilding landscape, I could not be more excited to welcome Hanwha as the first Korean shipbuilder to come to American shores—and I am certain they will not be the last,” reads a Thursday statement from Del Toro.
