Hyundai Heavy asks South Korean FTC to grant DSME takeover

2 July 2019 (Last Updated July 2nd, 2019 15:55)

Hyundai Heavy Industries Group has asked the South Korean Fair Trade Commission (FTC) to grant its takeover of Daewoo Shipbuilding and Marine Engineering (DSME).

Hyundai Heavy Industries Group has asked the South Korean Fair Trade Commission (FTC) to grant its takeover of Daewoo Shipbuilding and Marine Engineering (DSME).

A final decision will be taken by the FTC after it has carried out a thorough review of the potential effects that the merger could have on the shipbuilding market.

As well as approaching the FTC, Hyundai Heavy has also filed similar applications with anti-trust authorities in Japan, China, Kazakhstan and the European Union, with additional plans in place to request permission from other countries, too.

The move follows Hyundai Heavy’s announcement from March this year that it was set to acquire DSME from the Korea Development Bank (KDB).

As part of the deal, it was said that KDB would transfer its entire 55.7% stake of DSME in exchange for Hyundai Heavy’s new shares.

The state-owned bank also agreed to provide KRW1trn ($857.94m) to support DSME.

Since April, Hyundai Heavy has been discussing the matter with EU regulators before it submits its pre-merger filings.

In a statement to Yonhap, Hyundai Heavy said: “We’ve prepared thoroughly to meet the standards set by each anti-trust regulator. We’ll do our best to complete the takeover of Daewoo Shipbuilding as quickly as possible.”

In June, Hyundai Heavy Industries became a subsidiary of Korea Shipbuilding & Offshore Engineering (KSOE), its new holding company.

If the proposed transaction goes ahead, Hyundai Heavy will become KSOE’s fourth shipbuilder, joining Hyundai Samho Heavy Industries, Hyundai Mipo Dockyard and Daewoo Shipbuilding.