South Korea's FTC approves Hanwha Group's increased stake in KAI

By Kang Yoon-seung

SEJONG, Aug. 31 (Yonhap) -- South Korea's fair trade watchdog on Monday approved Hanwha Group's recent acquisition of additional stakes in Korea Aerospace Industries Ltd. (KAI).

The Fair Trade Commission's (FTC) approval came after Hanwha Systems Co. recently purchased a 3.45 percent stake in KAI, raising Hanwha Group's combined stake in the aircraft manufacturer to 15.89 percent, including the 9.9 percent held by Hanwha Aerospace Co.

"KAI's largest shareholder is the Export-Import Bank of Korea, with a 26.41 percent stake, while the National Pension Service holds 8.75 percent," the FTC said.

"At this stage, we have concluded that Hanwha Group's 15.89 percent stake is not sufficient to exercise substantial influence over KAI's overall management," the watchdog said.

The FTC, however, noted that it would conduct another merger review if Hanwha becomes KAI's largest shareholder, or if Hanwha executives concurrently account for at least one-third of KAI's executives.

KAI, South Korea's sole aircraft manufacturer, produces the KF-21 advanced fighter jet, the FA-50 light combat aircraft and its trainer variants, as well as the Surion and Miron helicopters.

Hanwha Group has been steadily increasing its hold on KAI as part of its broader ambition to establish an integrated aerospace and defense ecosystem spanning aircraft, satellites, launch vehicles, ships and other high-tech defense systems.