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December 13, 2021

HHI and DSME merger to undergo EU antitrust veto

Both companies failed to offer countermeasures that would resolve competition concerns.

The proposed takeover of Daewoo Shipbuilding and Marine Engineering (DSME) by Hyundai Heavy Industries (HHI) in South Korea will reportedly face a European Union (EU) antitrust veto.

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This comes after both firms failed to provide countermeasures that would address competition concerns, reported Reuters.

Last month, the EU reached a consensus to block the proposed transaction.

However, last week HHI reportedly expected the acquisition to secure an ‘unconditional’ nod from the European Commission (EC).

The company anticipated that the regulator would arrive at a favourable decision, along with the regulators in Singapore, China and Kazakhstan that have already sanctioned the deal.

HHI was quoted by the news agency as saying: “Market dominance cannot be evaluated by market share alone in the shipbuilding industry. It is important to also assess the market based on overall market conditions and dynamics. The shipbuilding market is unable to be structurally dominated by one individual company.”

The EC will announce its decision on the issue by 20 January 2022.

In March 2019, HHI struck a deal to take over a 55.72% stake in DSME.

However, in December 2019, the EC initiated a probe into the $1.8bn deal to evaluate the impact of the merger on competition grounds.

After the preliminary inquiry, the commission found that the merger would reduce competition in the cargo shipbuilding market considerably, leading to higher prices and decreased incentives to innovate.

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What’s missing from your IPO industry assessment?

IPO activity all but stopped in 2020, as the investment community grew wary of the effects of COVID-19 on economies. No matter how deserving a business was of flotation, momentum was halted by concerns of when a ‘new normal’ of working patterns and trade would set in. Recently, sentiment has changed. Flotations picked up again during the second half of 2021, and now in 2022 the mood is decidedly optimistic. Business leaders have their eyes on fast rebounding economies, buoyant market indices and the opportunity once again to take their businesses public. As a result, global IPOs are expected to hit back this year. With GlobalData’s new whitepaper, ‘IPOs in Consumer and Retail: 5 must-include elements for your prospectus industry report’, you can explore exactly what is needed in the essential literature. GlobalData’s focus lies in the critical areas to get right:
  • Macroeconomic and demographic environment
  • Consumer context
  • Industry environment
  • Competitive environment
  • Route to market
Interested to learn more about what to include in your IPO Industry Assessment report? Download our free whitepaper.
by GlobalData
Enter your details here to receive your free Report.

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