Major Korean stockbreeder Harim on Thursday said it has acquired maritime transportation operator Pan Ocean for 1 trillion won ($900 million), aiming to become a global agricultural product distributor.

According to the company, Harim Group and its partner JKL signed a deal to take over 58 percent of Pan Ocean after the Seoul Central District Court gave its approval in December. 

The chicken processor and stockbreeder said there would be a capital increase of 850 billion won through the issuance of 340 million shares. The remaining 158 billion won will be covered by issuing corporate bonds offering an annual return of 5 percent over five years.

Pan Ocean, the former maritime logistics unit of now-bankrupt STX Corporation, controls about 90 vessels, mostly modest-sized bulk carriers as well as large ore carriers, chemical carriers and an LNG carrier. After the collapse of STX, Pan Ocean in June 2013 filed for court receivership and was put out in the market for public tender.

The very unlikely marriage of the companies is expected to help Harim become a global agricultural powerhouse, like U.S. agricultural and bioengineering giant Cargill. Harim, named the best private company in the U.S. in 2014 by Forbes magazine, also has an ocean shipping unit for stable distribution. 

Harim chairman Kim Hong-kuk has openly expressed his zeal to add a maritime logistics arm to his 4.3 trillion won company in order to strengthen the feedstuff sector. Harim has chicken processing firms Harim and Orpum, stock feedstuff units Farmsco and Sunjin, and TV shopping channel NS Home Shopping. The business group’s feedstuff sector posted 1.4 trillion won in 2013, and its distribution market is expected to grow rapidly, as 97.3 percent of corn and soybean cakes are imported, company insiders said.

Harim has also recently started global expansion to countries such as the U.S., the Philippines, Vietnam and Myanmar, which accentuates the importance of Pan Ocean.

“Pan Ocean’s bulk carriers optimized for agricultural products was what we needed to stabilize and make our logistics more efficient. Through the acquisition we will be able to advance into global agricultural distribution market, something we have long sought,” a Harim spokesman said.

But there are reservations about Harim’s business slowing down. The company was in the red last year with losses of 1.1 billion won.

“In the long term, Harim might enter the Chinese and Japanese markets with the new infrastructure,” a source said.

By Bae Ji-sook (baejisook@heraldcorp.com)