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Hyundai Heavy seeking to conduct on-site inspection of Daewoo Shipbuilding

All News 15:48 June 14, 2019

SEOUL, June 14 (Yonhap) -- Hyundai Heavy Industries Co. said Friday it will conduct on-site inspections of Daewoo Shipbuilding & Marine Engineering Co. in the face of strong opposition from unionized workers over the planned merger between the two local shipbuilders.

Hyundai Heavy and the state-run Korea Development Bank (KDB) have attempted to complete their due diligence of Daewoo Shipbuilding's Okpo shipyard in Geoje, 350 kilometers south of Seoul, by Friday.

But their entry into the shipyard was blocked by unionized workers at Daewoo Shipbuilding.

Although the merger process can go on without on-site inspections, Hyundai Heavy said it still wants to visit Daewoo Shipbuilding's main shipyard before completing the deal.

In March, Hyundai Heavy signed a deal worth an estimated 2 trillion won (US$1.6 billion) with KDB to buy Daewoo Shipbuilding. The bank is the largest shareholder of Daewoo Shipbuilding, with a controlling 55.7 percent stake in the company.

Under the deal, Hyundai Heavy was divided into a subholding company and a reorganized Hyundai Heavy Industries that will carry out its shipbuilding and offshore business.

Daewoo Shipbuilding will be controlled under the subholding company named Korea Shipbuilding & Offshore Engineering (KSOE) Co.

In order to compete the merger, the deal also needs approval from antitrust watchdogs from other countries.

The unionized workers at Hyundai Heavy and Daewoo Shipbuilding both are in opposition to the merger, saying it will lead to job cuts and harm their working conditions.

This file photo provided by the labor union of Daewoo Shipbuilding & Marine Engineering Co. on June 12, 2019, shows the unionized workers' protest against Hyundai Heavy Industries Co.'s on-site inspection of the company's Okpo shipyard in Geoje, 350 kilometers south of Seoul. (PHOTO NOT FOR SALE) (Yonhap)


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