▶ Merger agenda approved at board meetings on the 27th, consolidated HD Hyundai Heavy Industries to be launched in December 2025 ▶ Quantitative and qualitative expansion to lead K-Defense, broaden markets, and secure unrivaled technologies ▶ Combined capabilities and know-how to target KRW 10 trillion in annual defense revenue by 2035 ▶ Establishing Singapore-based entity for overseas operations, shipyard development, and global partnerships ▶ “A strategic decision for broader markets and stronger shipbuilding to lead the future industry.”   HD Korea Shipbuilding & Offshore Engineering (HD KSOE) announced that it is pursuing restructuring of its shipbuilding business to enhance global competitiveness and expand orders in Korea’s shipbuilding and defense sectors, as the MASGA project is set to go into full swing.   On the 27th, HD KSOE, HD Hyundai Heavy Industries (HHI), and HD Hyundai Mipo (HMD) each held board meetings, where HHI and HMD approved a merger agenda.   Following an extraordinary general meeting and merger review process, the two companies will relaunch this December as the consolidated HHI.   This restructuring aims to maximize both quantitative and qualitative synergies, expand and diversify markets, and secure a decisive competitive edge in the fiercely contested global market through the preemptive development of advanced technologies.   China and Japan, Korea’s key competitors, have also recently completed mergers between their respective No. 1 and No. 2 shipbuilders to strengthen competitiveness. The launch of HHI stands out as a merger between the world’s leading large and mid-sized shipbuilders, expected to significantly expand overall capacity and market reach.   In particular, the merger is set to provide HHI with a major opportunity to strengthen its competitiveness in the defense sector, which has been drawing increasing global attention.   HHI has accumulated advanced technology and extensive know-how as Korea’s leading shipbuilder in terms of naval ship construction and exports. By combining this with HMD’s optimized dock facilities, equipment, and skilled workforce, HHI aims to swiftly capture opportunities in the rapidly growing global defense market.   Following the Korea-U.S. summit and the launch of the MASGA project, coupled with the global trend of naval forces enhancing their capabilities, demand for Korean defense is expected to continue rising.   According to UK defense journal Janes, the global market for new naval shipbuilding contracts over the next decade is projected to total around 2,100 vessels, valued at approximately USD 360 billion. HHI has set a goal of achieving KRW 10 trillion in annual defense revenue by 2035.   HHI also plans to integrate both companies’ track records to further broaden market entry and share in the specialized vessel market—such as icebreakers, where demand is growing with Arctic development.   The company further aims to accelerate its technological edge by preemptively securing eco-friendly innovations. By applying these technologies from mid-sized to large vessels—leveraging the combined R&D and design capabilities of both companies—HHI seeks to lead the paradigm shift driven by environmental regulations, while reducing R&D risks, time, and costs.   In addition, HD KSOE, together with HHI, will establish a new overseas business entity within its shipbuilding division.   Scheduled to be established in Singapore this December, the new entity will serve as a regional hub overseeing overseas production sites such as HD Hyundai Vietnam Shipbuilding, HD Hyundai Heavy Industries Philippines, and HD Hyundai Vina (tentative name). It will manage overseas operations including new yard development and business cooperation.   This move is aimed at regaining market share in the commercial ship sector—such as bulk carriers and tankers—where Korean shipbuilders are struggling against Chinese rivals. It also seeks to streamline decision-making processes to accelerate overseas business expansion.   “This restructuring reflects our strategic vision to broaden markets and strengthen shipbuilding. With the launch of the consolidated entity, we will drive market expansion and secure unrivaled technologies to lead the future shipbuilding industry,” said an HD KSOE official.   Meanwhile, the merger will be carried out by issuing new HHI shares to the shareholders of HMD, the company being absorbed. According to the merger ratio, HMD common shareholders will receive 0.4059146 HHI shares for each HMD share they hold.

▶ On Monday, August 25, HD Hyundai signed MOU to establish a multi-billion-dollar investment program ▶ Investing jointly with the U.S. Cerberus Capital, the program will support the acquisition and modernization of U.S. shipyards ▶ Signaling the first tangible outcome of the Korea-U.S. summit — “Opening a new chapter in the global shipbuilding industry.” HD Hyundai has officially launched a multi-billion-dollar investment program to revitalize the U.S. shipbuilding industry — marking the first milestone in the ‘Make American Shipbuilding Great Again (MASGA)’ initiative. HD Hyundai announced on Monday, August 25 (EST) that it had signed a Memorandum of Understanding (MOU) with Cerberus Capital and the Korea Development Bank (KDB) at the InterContinental The Willard in Washington, D.C., to establish a Korea-U.S. maritime joint investment program. The signing took place at the Korea-U.S. Manufacturing Partnership MOU ceremony, presided over by U.S. Secretary of Commerce Howard Lutnick and Korea’s Minister of Trade, Industry and Energy Kim Jung-kwan. The ceremony was attended by Chung Kisun, Executive Vice Chairman of HD Hyundai; Frank Bruno, CEO of Cerberus; and Kim Bock-kyu, Vice Chairman and COO of KDB. The investment program aims to revitalize and enhance maritime capabilities for the United States and allied nations, including U.S. shipbuilding, maritime infrastructure, and advanced marine technologies. Priority investment areas include the acquisition and modernization of U.S. shipyards; capital investment in equipment and component suppliers to reinforce supply chains; and the development of advanced shipbuilding technologies, including autonomous navigation and artificial intelligence (AI). HD Hyundai will serve as both an anchor investor and a technical and industrial partner to help ensure the effective management of the program. In particular, leveraging its accumulated industrial expertise in the shipbuilding and maritime sectors, the company will evaluate the technological feasibility, competitiveness, and growth potential of investment targets, thereby contributing to the program’s decision-making process. Cerberus will act as the program’s management company, overseeing overall investment strategy and operations. KDB will help ensure the successful operation of the investment program by providing support to Korean investors. This MOU represents the first tangible outcome of Korea-U.S. cooperation in the shipbuilding sector following the bilateral summit. HD Hyundai anticipates that it will serve as a significant opportunity to reinforce strategic collaboration between the two countries in shipbuilding and to establish a new model of partnership. HD Hyundai Executive Vice Chairman Chung Kisun said, “We believe that our partnership with Cerberus Capital will not only provide tangible support for MASGA, which aims to revitalize the U.S. shipbuilding industry, but also create new markets and growth opportunities for Korean shipbuilders. Leveraging our proven expertise and digital capabilities, HD Hyundai will support the modernization of U.S. shipbuilding and work with both nations to shape a new chapter in the global shipbuilding industry.” Cerberus CEO Frank Bruno commented, “We’re proud to announce this first-of-its kind partnership that brings together the strengths of Cerberus and HD Hyundai to support this historic commitment to revitalizing the U.S. maritime sector. We believe our strategy can play an important role by bringing investments alongside operational and technical capabilities to high-impact opportunities. We would like to thank President Trump and the entire bi-partisan effort to advance maritime reindustrialization in the Unites States and allied nations, and we are extremely grateful for the strong support from South Korea and their bold commitment to MASGA.” KDB Vice Chairman & COO Kim Bock-kyu added, “This investment program is a visionary model of cooperation in the shipbuilding industry, and a manifestation of the enduring trust and partnership between Korea and the United States. As a representative of the Korean financial industry, KDB is proud to play a central role in supporting this program to ensure its success.” Meanwhile, HD Hyundai has been actively pursuing cooperation with the United States as part of its ongoing efforts to revitalize the shipbuilding industry. In April, the company signed an MOU for collaboration in the naval ship sector with Huntington Ingalls Industries, followed in June, by a commercial vessel partnership with Edison Chouest Offshore. Earlier this month, HD Hyundai also secured a contract to conduct the regular overhaul of the 41,000-ton dry cargo and ammunition ship, USNS Alan Shepard of the U.S. Navy’s 7th Fleet. <EOD> ※ Make American Shipbuilding Great Again (MASGA) Project : A large-scale joint initiative between Korea and the United States aimed at revitalizing the U.S. shipbuilding industry. The project focuses on the modernization and advancement of U.S. shipyards, strengthening supply chains through investment in equipment and component suppliers, and development of next-generation technologies. ■ Photo description: On the 25th (local time), HD Hyundai signed a Memorandum of Understanding (MOU) at the InterContinental The Willard in Washington, D.C., to establish a Korea-U.S. maritime joint investment program. (From left: Kim Jung-kwan, Korea’s Minister of Trade, Industry and Energy; Kim Bock-kyu, Vice Chairman and COO of Korea Development Bank; Frank Bruno, CEO of Cerberus Capital; Chung Kisun, Executive Vice Chairman of HD Hyundai; Howard Lutnick, U.S. Secretary of Commerce)

▶ Company leaders reunited in Seoul five months after their March meeting in the U.S.; reviewed supply chain expansion and commercialization progress ▶ HD Hyundai to supply reactor vessels, a key component of Natrium® reactors which are recognized for its superior safety and technological maturity ▶ Chung Kisun: “This will mark a turning point in building a global nuclear supply chain and advancing the energy paradigm shift.” ▶ Chris Levesque: “Partnering with HD Hyundai, we aim to accelerate commercialization of Natrium reactors and create global market opportunities.” HD Hyundai announced on Friday, August 22, that Executive Vice Chairman Chung Kisun met with TerraPower leadership, including chairman and founder Bill Gates in Seoul, Korea. The group reviewed progress on supply chain expansion and the commercialization of Natrium reactors, as well as discussed future cooperation opportunities. The meeting between the company leaders marked a first reunion in five months since initial talks in the United States last March. During the previous meeting, HD Hyundai and TerraPower signed a memorandum of understanding (MOU) to expand the global manufacturing supply chain for the commercialization of Natrium reactors. TerraPower’s Natrium reactors, a Generation IV small modular reactor (SMR) sodium-cooled fast reactor (SFR) design with built-in energy storage, are regarded as one of the most advanced SMRs in existence. It offers high thermal efficiency, superior safety, and generates about 40% less nuclear waste compared to conventional reactors, making it widely recognized for its technological maturity and safety advantages. Leveraging its expertise and manufacturing capabilities in SMRs, HD Hyundai has signed a contract to supply TerraPower with the reactor vessels for the first Natrium reactor*. The existing MOU allows companies to explore expanding the supply chain for Natrium reactors to support the global commercialization of the Natrium technology. Executive Vice Chairman Chung Kisun commented, “Next-generation SMR technology is a core solution for realizing sustainable future energy. Our partnership with TerraPower will serve as a turning point in building a global nuclear supply chain and advancing the transition in the energy paradigm.” Chris Levesque, President and CEO of TerraPower, stated, “HD Hyundai is not only a premier, globally recognized shipbuilder but also a key supply chain partner with deep manufacturing expertise which will play an important role in the global nuclear industry. Through our collaboration, we aim to accelerate the commercialization of Natrium reactors and continue creating global opportunities in the market.” Meanwhile, HD Hyundai is also stepping up efforts to develop nuclear-powered vessels, including its work with TerraPower on molten salt reactor (MSR) technologies for potential applications in the shipbuilding sector. * a TerraPower and GE Hitachi technology