EU Antitrust Authorities to Block Hyundai Heavy Industries and Daewoo Shipbuilding & Marine Engineering Merger

"Opposition to LNG Ship Market Monopoly"
"Seemingly Concerned About Rising European Gas Transportation Fees"

[Image source=Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] Major foreign media outlets, citing sources, reported that the European Union (EU) antitrust authorities are expected to block the merger between Hyundai Heavy Industries Group and Daewoo Shipbuilding & Marine Engineering. The EU is reportedly opposing the merger on concerns that it would create a monopoly in the global large liquefied natural gas (LNG) carrier market.

On the 11th (local time), AFP quoted sources from the Competition Division under the European Commission, the EU's antitrust regulatory body, saying, "In the coming days, we plan to announce the decision to reject the approval of the merger between Hyundai Heavy Industries and Daewoo Shipbuilding & Marine Engineering."

Earlier, major foreign media reported that the EU antitrust authorities oppose the merger, warning that it could create a monopoly in the LNG carrier market. Additionally, among the 75 ultra-large LNG carriers ordered worldwide last year, the two companies secured 45 vessels, accounting for 60%. Meanwhile, Asian LNG freight costs have surged past $300,000 per day (approximately 358.8 million KRW) due to soaring demand, raising concerns within the EU about rising gas freight rates.

Hyundai Heavy Industries requested merger reviews from the EU and six other overseas authorities in 2019 and has so far received approvals from China, Singapore, and Kazakhstan. Reviews are ongoing in South Korea, Japan, and the EU, and it is known that if even one of these three authorities exercises a veto, the merger will be impossible.

The European Commission began reviewing the corporate merger between Korea Shipbuilding & Offshore Engineering, the holding company for Hyundai Heavy Industries Group's shipbuilding division, and Daewoo Shipbuilding & Marine Engineering in December 2019. However, citing the COVID-19 pandemic, the review was temporarily suspended three times and only resumed in November last year. The review deadline is January 20 of this year, and there are criticisms within the EU that the review period is unusually long.

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