[Exclusive] KAI President Says, "Hanwha Cannot Acquire KAI If Employees Do Not Want It... Government Would Oppose It Over Monopoly Concerns"

[Financial News] Korea Aerospace Industries (KAI) President Kim Jong-chul dismissed the possibility of Hanwha Group acquiring KAI, including by increasing its stake, saying, "If the members do not want it, there is no way KAI will be acquired by Hanwha." He expressed confidence that the government would oppose Hanwha Group's acquisition because it would make Hanwha a monopoly in the defense sector.
According to industry sources on the 9th, Kim made the remarks at a meeting with employees held the previous day at KAI's headquarters in Sacheon. Regarding Hanwha's acquisition of a stake in KAI, he said, "In a capitalist society, you cannot stop someone from buying shares," before making the point above.
Kim emphasized that the defense market currently consists of a Big Four comprising Hanwha affiliates such as Hanwha Aerospace, LIG Nex1, Hyundai Rotem, and KAI. "I believe it is right to maintain the defense industry's Big Four. The balance must not be disrupted," he said. Regarding the possibility of Hanwha acquiring an additional stake in KAI, Kim stated, "DAPA and MOTIE will oppose it," adding, "If Hanwha gains a monopoly in the defense industry, the competitive system will inevitably collapse."
Kim believes there is no reason for the government to sell KAI to a private company at this point, given the various circumstances. He also cautioned against overinterpreting KEXIM's recent commissioning of a consulting project to strengthen the competitiveness of the space and aerospace industries, describing it as "a consulting project related to the space business."
Kim disclosed that he had also spoken by phone with the president of KEXIM and stressed that it had "nothing to do with an acquisition."
Hanwha Aerospace and Hanwha Systems currently hold more than a 15% stake in KAI, making Hanwha Group KAI's second-largest shareholder.
Kim also left open the possibility that companies other than Hanwha Group could make additional equity investments. "Several companies view KAI as an attractive company, so companies other than Hanwha may also accumulate shares in KAI," he said.
Meanwhile, Kim said he plans to propose to Cheong Wa Dae that an investment of several trillion won is needed to develop a next-generation midsize civilian aircraft. KAI recently signed a memorandum of understanding with Brazilian aerospace company Embraer for strategic cooperation in aircraft structures.
[email protected] Kim Yun-ho, Kim Hak-jae Reporter