EU Notifies Interim Review of Hyundai Heavy-Daewoo Shipbuilding Merger... Decision by September 3

EU Commission Appears to Narrow Corporate Merger Review Scope to LNG Ships and Others

[Asia Economy Reporter Park So-yeon] The European Union (EU)'s merger review of Hyundai Heavy Industries and Daewoo Shipbuilding & Marine Engineering appears to be in its final stages.

The European Commission of the EU recently notified Hyundai Heavy Industries of an interim review report related to the merger with Daewoo Shipbuilding & Marine Engineering.

On the 11th, EU competition law specialist media MLEX reported that the EU Commission had issued a Statement of Objections (SO) to Hyundai Heavy Industries.

The EU Commission is examining whether the merger between Hyundai Heavy Industries and Daewoo Shipbuilding & Marine Engineering could seriously restrict market competition, and based on investigations and analyses so far, has produced an interim result.

The EU's SO corresponds to the interim review report of South Korea's Fair Trade Commission and is known as a standard procedure in merger reviews.

The EU Commission is expected to focus its review on gas carriers such as LNG (liquefied natural gas) carriers and LPG (liquefied petroleum gas) carriers going forward.

The report reportedly states that concerns about competition restrictions have been resolved in sectors such as tankers, container ships, and offshore plants, but issues in the gas carrier sector have not yet been fully resolved.

In other words, the areas concluded to have no issues are set aside, and now the scope is narrowed to gas carriers for further examination.

An industry insider said, "In the past, Korean shipbuilders dominated gas carriers such as LNG carriers, but recently, as seen in the Qatar project where Chinese companies took the lead, competition has actually increased."

However, some express concerns that the EU might use the recent large-scale acquisition of Qatar LNG carriers by Korean companies as grounds for opposition.

A Hyundai Heavy Industries Group official said, "We have received the EU Commission's interim review report, but as the subject of the review, we cannot disclose specific details," adding, "We will review the related content promptly and submit additional materials."

The EU Commission had postponed the review due to the impact of the COVID-19 pandemic but resumed it on the 3rd, setting the deadline as September 3.

Hyundai Heavy Industries Group applied for merger reviews in six countries, starting with South Korea's Fair Trade Commission in July last year.

Applications were submitted to China, Kazakhstan, and Singapore, and in September, preliminary consultations began with Japan. In October, the first approval was obtained from Kazakhstan.

Once all merger reviews are completed, Korea Shipbuilding & Offshore Engineering and the Korea Development Bank will exchange their respective shares in Korea Shipbuilding & Offshore Engineering and Daewoo Shipbuilding & Marine Engineering, finalizing the acquisition of Daewoo Shipbuilding.

This content was produced with the assistance of AI translation services.