By Jack Kim and Joyce Lee
SEOUL (Reuters) -South Korea’s Hanwha Aerospace Co said on Friday it will spin off its industrial solutions and semiconductor equipment businesses from its flagship defence division.
On Tuesday, shares of Hanwha Aerospace jumped more than 15% on expectations of a possible spinoff to strengthen its focus on defence. Shares fell 8% on early morning trade on Friday versus a 0.4% drop in the wider market on profit-taking.
“Hanwha Group is upgrading management efficiency and strengthening its business competitiveness by separating its defence business and industrial solutions business,” it said in a statement.
The spinoff is in line with Hanwha Group’s ongoing efforts to streamline its flagship defence business which will be the focus of Hanwha Aerospace.
Analysts said the restructuring of Hanwha’s governance and additional growth strategies will be positive for its focus on the defence business.
Following the spinoff, Hanwha Aerospace will consolidate its defence businesses along with its two subsidiaries, Hanwha Ocean and Hanwha System, spanning vessels, ground-based equipment and space launch vehicles, it said.
(Reporting by Jack Kim and Joyce Lee; Editing by Ed Davies and Christopher Cushing)
