January 14, 2022 12:02
The EU has blocked a mega-merger between Korean shipbuilders Hyundai Heavy Industries and Daewoo Shipbuilding and Marine Engineering. Hyundai Heavy had been seeking to absorb Daewoo Shipbuilding for the past three years.
That puts the future of Daewoo Shipbuilding, which has been managed by main creditor Korea Development Bank, on the line again after the EU antitrust watchdog cited concerns that the merger could threaten competition in the global market for large liquefied natural gas (LNG) carriers.
Hyundai Heavy needs approval from all the countries where it operates, and even one veto could jeopardize the deal. China and Korea have already given the go-ahead since Hyundai Heavy signed a contract with KDB back in 2019 to acquire and absorb Daewoo Shipbuilding.
The two Korean shipbuilders would account for a 60-percent share of the global market for LNG carriers. If Hyundai Heavy and Daewoo Shipbuiling jack up LNG vessel prices, the EU fears shipping companies like Maersk of Denmark and CMA CGM of France could suffer damage. Among six countries Hyundai Heavy sought approval from, China, Singapore and Kazakhstan have given their unconditional approval.
The Ministry of Trade, Industry and Energy said Daewoo must find a new owner and pledged to come up with a new plan to strengthen the shipbuilder's competitiveness.
- Copyright © Chosunilbo & Chosun.com