South Korean shipbuilder Hyundai Heavy Industries’ (HHI) $1.8bn merger with Daewoo Shipbuilding & Marine Engineering (DSME) is set to be probed by the EU antitrust watchdog.

The European antitrust authorities have expressed serious concerns over the deal.

The European Commission (EC) will initiate the probe into the deal next week after completion of a primary review, which is scheduled to conclude on 17 December.

It is believed that a full probe will take up to five months to conduct.

HHI agreed to acquire a controlling stake in its rival DSME from Korea Development Bank (KDB) in February.

Following the completion of the deal, HHI plans to set up a joint shipbuilding venture with KDB, which holds the largest share in DSME.

With a 21% market share, the combined company is expected to become the largest ship-maker in the world.

In July, HHI requested the South Korean Fair Trade Commission (FTC) to grant permission for the proposed takeover of Daewoo Shipbuilding and Marine Engineering (DSME).

HHI has filed similar applications with antitrust authorities in Japan, China and Singapore, with additional plans in place to request permission from the regulators of other countries.

Kazakhstan has already granted permission for the proposed merger. Recently, Hyundai said it is collaborating with Singapore’s regulators to address their concerns.

A Hyundai Heavy Industries spokesman said: “We will do our best to get approval without any problems.”

Earlier, Hyundai has said that after the merger completion both companies will separately compete in the shipping market.