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EU delivers interim report on Hyundai-Daewoo deal

Industry 17:25 June 11, 2020

By Nam Kwang-shik

SEOUL, June 11 (Yonhap) -- The European Union (EU) has delivered its interim report on the proposed deal between South Korea's top two shipbuilders, and its review may be in the final stretch, industry sources said Thursday.

In December last year, the European Commission (EC), the executive body of the EU, opened its probe into the acquisition of Daewoo Shipbuilding & Marine Engineering Co. (DSME) by Korea Shipbuilding & Offshore Engineering Co. (KSOE), the shipbuilding sub-holding company of Hyundai Heavy Industries Group.

However, the EC suspended in March its review of the acquisition due to the coronavirus pandemic.

The EC resumed on June 3 its investigation into the US$1.8 billion acquisition deal, aiming for its completion by September.

These file photos, provided by Hyundai Heavy Industries Co. and Daewoo Shipbuilding & Marine Engineering Co., shows Hyundai's shipyard (left) and Daewoo's shipyard. (PHOTO NOT FOR SALE) (Yonhap)

"We have received the interim report (from the EC), but we could not reveal its details as the party concerned with the investigation," an official at Korea Shipbuilding said on condition of anonymity, adding it will submit additional data to the commission as soon as possible.

The EC is expected to focus mainly on whether the deal will hurt market competition in the shipbuilding field of liquefied natural gas (LNG) and liquefied petrochemical gas (LPG) carriers, industry insiders said.

In March 2019, Hyundai Heavy Industries Group signed a deal to buy a 55.72 percent stake in Daewoo Shipbuilding, which could create the world's biggest shipbuilder with a 21 percent share in the global shipbuilding market.

In a bid to acquire Daewoo Shipbuilding, Hyundai Heavy Industry Group split Hyundai Heavy Industries into two entities -- Korea Shipbuilding, a sub-holding company that governs shipbuilding units under the group, and a reorganized Hyundai Heavy Industries Co.

The deal needs regulatory approval from six countries -- South Korea, China, Kazakhstan, Japan, European Union and Singapore. Kazakhstan approved the deal in October 2019.

ksnam@yna.co.kr
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