Hanwha Group has increased its stake in Korea Aerospace Industries (KAI) to more than 15%, strengthening its position in South Korea’s aerospace and defense sector and signaling a deeper push to integrate its aviation, defense, space and artificial intelligence businesses.
Hanwha Systems said Monday that it had raised its stake in KAI to 4.98% through additional purchases of the company’s shares. Combined with stakes held by Hanwha Aerospace and Hanwha Aerospace USA, at 9.90% and 1.01%, respectively, Hanwha Group’s total stake in KAI has reached 15.89%.
Hanwha Systems had announced last month that it planned to invest up to 500 billion won to acquire additional KAI shares by the end of this year. It has purchased roughly 3.45% of KAI through the market over the past month.
With its combined stake now exceeding 15%, Hanwha is expected to file a business combination report with the Korea Fair Trade Commission. Under South Korea’s competition rules, the acquisition of 15% or more of a listed company’s shares can trigger a merger review.
Industry observers, however, expect the review to proceed through a simplified process because Hanwha does not currently have management control over KAI. Korea Eximbank remains KAI’s largest shareholder with a 26.41% stake, while Hanwha became the company’s second-largest shareholder after surpassing the National Pension Service in June.
Hanwha has emphasized that its increased stake is aimed primarily at strengthening strategic cooperation rather than immediately seeking management control. The group is considering ways to participate in decision-making related to expanding business synergies between the two companies and supporting KAI’s global export efforts.
The move could create significant strategic overlap between Hanwha’s defense portfolio and KAI’s expertise in fighter jets, helicopters and aerospace systems. Hanwha has capabilities spanning defense electronics, propulsion systems, land and naval weapons, while KAI is developing major platforms including the KF-21 fighter jet and a range of aerospace technologies.
The investment also comes as Hanwha accelerates a massive long-term expansion into the space industry. Last month, the group unveiled a plan to invest 55 trillion won through 2040 in space and AI-related businesses, including independent launch vehicles, satellite systems and space-based AI data centers.
Hanwha plans to establish an aerospace and space industrial belt connecting Changwon in South Gyeongsang Province, where Hanwha Aerospace has major operations, with Sacheon, home to KAI, and Goheung in South Jeolla Province, where the Naro Space Center is located.
The group aims to connect its businesses across launch vehicles, satellite communications, defense systems, aircraft and AI infrastructure to build an integrated space and aerospace ecosystem.
Kim Dong-kwan, vice chairman of Hanwha Group, said when the strategy was announced that South Korea could become a true AI space powerhouse when space, aviation, AI and defense are connected as one.
