South Korea's defense-to-energy conglomerate Hanwha Group is expected to complete on-site inspection on Daewoo Shipbuilding & Marine Engineering this month, with plans to finish the acquisition process within the first half of next year, industry sources said Monday.

Hanwha began inspection on DSME last month, but had extended the original four-week long period to six weeks, citing its need to thoroughly analyze DSME’s status and competitiveness in the market. The shipbuilder has been under the state supervision for 21 years.

In September, Hanwha signed a conditional memorandum of understanding with DSME to acquire a controlling stake of 49.3 percent and managerial control of the shipbuilder. Hanwha’s six affiliates -- including its defense unit Hanwha Aerospace and an energy equipment company, Hanwha Systems Co. -- will purchase DSME’s newly issued stocks worth 2 trillion won ($1.39 billion), according to the state-run Korea Development Bank.

After inspection, Hanwha will forge a formal agreement with DSME before the year-end. Then the deal will go through government evaluation by the Fair Trade Committee. Firms are targeting to complete the acquisition process within the first half of next year.

As this comes as Hanwha’s second attempt to acquire DSME after 2008, market insiders are keen on how Hanwha’s takeover of DSME could add value to its defense business portfolio.

Earlier this year, Hanwha placed all of its defense units under its aircraft engines manufacturing affiliate Hanwha Aerospace.

Industry experts saw that DSME’s major business of building special ships such as battleships and submarines will strengthen Hanwha’s competitiveness in the defense market.

Hanwha has recently forged a deal with Poland to supply 288 Chunmoo multiple rocket launchers, which are expected to be worth around $6 billion.

DSME’s liquefied natural gas business is also expected to create synergy with Hanwha's green energy business, as solar panel producer Hanwha Solution is the group's key cash cow, other industry experts said.