"Slow Recovery Despite Joseon Supercycle"... Gyeongnam Chamber of Commerce Steps In After Growing Frustration

On the 12th, the Gyeongnam Chamber of Commerce and Industry Council sent a petition to the Fair Trade Commission, which is currently reviewing the corporate merger between Hanwha Group and Daewoo Shipbuilding & Marine Engineering (DSME), urging the commission to promptly grant unconditional approval to the two companies.

Regarding Hanwha Group's acquisition of DSME, among the eight countries subject to the corporate merger review, which is considered the most important procedure following the signing of the main contract, seven countries including the European Union have already granted approval, leaving only the approval from South Korea's Fair Trade Commission pending.

Changwon Chamber of Commerce and Industry, Gyeongnam.
Photo by Lee Seryeong

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In this regard, it is known that the Fair Trade Commission is currently discussing corrective measures due to concerns that Hanwha Group, which has been manufacturing weapon systems for naval vessels, might block other naval shipbuilding companies by fully integrating DSME's naval ship division during the review process.

In response, the Gyeongnam Chamber of Commerce and Industry Council stated in the petition, “Weapon systems for naval vessels have a unique characteristic in that the government participates as the final consumer, rather than following general market logic.” They added, “Just as Apple is a competitor to Samsung Electronics in the smartphone market but remains an important customer in the semiconductor and application processor (AP) sectors, domestic naval shipbuilding companies are important clients for Hanwha Group's naval weapon systems and must continue their business relationships even after the corporate merger. The possibility of competition restrictions or information asymmetry, which the Fair Trade Commission is concerned about, is minimal.”

Furthermore, the petition argued that establishing a separate monitoring system or controlling normal corporate activities for Hanwha Group's acquisition of DSME, beyond the approval procedures, would create additional regulations that other companies do not face.

Therefore, the petition was sent to the Fair Trade Commission emphasizing that unconditional approval of the corporate merger between Hanwha Group and DSME should be promptly granted to enable active investment in the Gyeongnam shipbuilding industry, which has long faced difficulties.

A representative of the Gyeongnam Chamber of Commerce and Industry Council said, “Although the domestic shipbuilding industry, which has suffered a prolonged downturn, is entering a so-called super cycle with a sharp increase in orders due to the recovery of the global shipbuilding market, the number of shipbuilding workplaces and workers in Gyeongnam is slowly recovering to the levels of past boom periods.” They added, “We hope that the investment entity will be determined as soon as possible to serve as a driving force for the revitalization of the Gyeongnam shipbuilding industry and the regional economy.”

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