Daewoo Shipbuilding and Hyundai Heavy Industries Merger Rejected... Government Says "Industry Impact Will Not Be Significant"

At Daewoo Shipbuilding & Marine Engineering Okpo Shipyard in Geoje, a worker begins the morning shift with the rising sun. The COVID-19 pandemic has been ongoing for nearly two years. Countries around the world are implementing quarantine policies to overcome it and are putting all their efforts into escaping the disaster situation. The industrial landscape altered by COVID-19 is also adapting quickly. In particular, the business environment for the shipbuilding industry is expected to improve in 2022. With an increase in new orders, shipbuilders' bargaining power on prices has strengthened, and investment capacity for ships to comply with environmental regulations has expanded, welcoming the new year with sparks of improvement. / Geoje ? Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Lee Ji-eun] The government expressed regret over the European Union (EU) Commission's disapproval of the merger between Daewoo Shipbuilding & Marine Engineering and Hyundai Heavy Industries due to monopoly concerns in the liquefied natural gas (LNG) ship market, but it forecasted that the impact on the industry would not be significant.

On the 14th, the Ministry of Foreign Affairs stated, "Considering that the recent conditions of the shipbuilding industry have improved compared to 2019 when the merger was pursued, we judge that the EU's disapproval decision will not have a major impact on our shipbuilding industry."

The Ministry added, "Since competition authorities in China, Singapore, and Kazakhstan, which have completed their reviews, approved this corporate merger, we regret the EU's disapproval decision, which contrasts with theirs," but also said, "The government and related agencies will make full use of the improved conditions in the shipbuilding industry to steadily promote the enhancement of domestic shipbuilding competitiveness and the normalization of Daewoo Shipbuilding."

In particular, it emphasized that efforts to secure competitiveness in the shipbuilding industry will continue, focusing on ▲ transforming into a high value-added industry centered on core technologies and equipment ▲ smooth supply of production personnel ▲ building a win-win and developmental ecosystem.

The Ministry of Foreign Affairs stated, "The government's consistent position is that a 'private owner search' is necessary for the fundamental normalization of Daewoo Shipbuilding," and added, "Based on consulting from external professional institutions, the Industrial Bank of Korea (the major shareholder) plans to promptly prepare measures to strengthen Daewoo Shipbuilding's competitiveness."

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