HHIH likely to complete acquisition of DSME within H1: HHIH chairman

By Nam Kwang-sik

SEOUL, Jan. 4 (Yonhap) -- Global shipbuilding behemoth Hyundai Heavy Industries Holdings Co. (HHIH) will be able to complete the acquisition of smaller local rival Daewoo Shipbuilding & Marine Engineering Co. (DSME) within the first half of this year, the company's chairman said Monday.

"The review of the business combination (between HHIH and DSME) has been a little delayed but is expected to be completed within the first half of this year," HHIH's chairman Kwon Oh-gap said in his New Year's message.

The combination must obtain regulatory approval from six countries -- South Korea, China, Kazakhstan, Japan, the European Union and Singapore.

As of January, China, Kazakhstan and Singapore have approved the combination.

The Fair Trade Commission (FTC), South Korea's antitrust watchdog, is tipped to finalize the review of the combination between the two shipbuilding giants in a few months, an official at the watchdog said on Sunday.

The FTC has been reviewing the outlook of the shipbuilding industry after the outbreak of COVID-19, the official said.

All eyes have been on the EU's Competition Commission, which has suspended its review of the proposed acquisition three times, as market watchers predict that the EU's decision may be the key factor for the completion of the acquisition.

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

As part of efforts to acquire Daewoo Shipbuilding, Hyundai Heavy Industry group has divided the world's largest shipbuilder Hyundai Heavy Industries Co. into two entities -- Korea Shipbuilding & Offshore Engineering Co. (KSOE), a subholding company that governs shipbuilding units under the group, and a reorganized Hyundai Heavy Industries.

KSOE currently manages the group's three shipbuilding units -- Hyundai Heavy Industries, Hyundai Mipo Dockyard Co. and Hyundai Samho Heavy Industries Co.

HHIH is the holding company of the shipbuilding group.

The cumulative orders of the group's three shipbuilding units reached around US$10 billion or 116 ships in 2020, meeting 90 percent of their order target of $11 billion.

The shipbuilding units set their order targets at a combined $14.9 billion in 2021.

The group chairman also said its unit of Hyundai Construction Equipment will be the world's fifth-largest construction equipment maker if the group completes the deal to acquire Doosan Infracore Co.

In December, HHIH inked an initial deal to buy the largest local construction equipment maker from its cash-strapped parent, Doosan Heavy Industries & Construction Co.

ksnam@yna.co.kr
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