Harim Group has thrown its hat into the ring to take over South Korea's flagship carrier HMM.

The South Korean poultry business is the parent of Pan Ocean, the country's largest dry bulk shipping company that was acquired by Harim in 2015.

Harim and private equity player JKL Partners submitted a joint bid on 24 July to buy the 57.87% stake in HMM held by Korea Development Bank (KDB) and Korea Ocean Business Corporation (KOBC). The stake is estimated to be priced between US$3.9 billion and US$7.8 billion.

KDB and KOBC are both government-backed entities and assumed control of HMM after a debt-for-equity swap in 2016. With HMM having been profitable since 2020, the government has decided the time is right to relieve the company of state support.

The Harim-JKL bid was done in a similar fashion as the Pan Ocean acquisition. In June 2018, after Pan Ocean restored profitability, JKL sold its shares to Harim for a US$140 million profit.

Harim's expression of interest follows that of SM Line parent Samra Midas Group.

South Korean media has depicted the bids of Harim and SM Group as a contest between their respective chairmen, Kim Hong-kuk and Woo Oh-hyun. Both men are former business partners who worked together in the poultry business in the 1970s.

In 1978, Woo felt the construction sector was more prosperous, and switched industries, moving on a different track from Kim.

Kim's strategy aims at realising synergies between Harim's existing businesses and potential acquisitions. In 2001 and 2008, Harim acquired South Korean animal feed producers JeilFeed Corporation and Farmsco, respectively. In 2011, the company acquired the poultry business Allen Family Foods, starting its expansion into the United States.

Woo is said to enter any business that has good prospects, regardless of the industry. Since 2013, when SM Group acquired another dry bulk business, Korea Line Corporation, the group has taken controlling stakes in two other similar set-ups, Korea Shipping Corporation and Chang Myung Shipping.

SM Group began buying HMM's shares in 2021 and as of 7 July, has a 6.56% stake, making it HMM's third-largest shareholder, behind KDB and KOBC.

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