EU has Reached Consensus to Object to Korean Shipyard Merger

After two years of review and repeated delays as the coronavirus slowed the process, media reports are indicated that the European Union’s antitrust regulators will soon announce their official objection to the proposed merger of South Korea’s Hyundai Heavy Industries Co., Ltd and DAEWOO SHIPBUILDING & MARINE ENGINEERING CO., LTD (DSME).

It would be the second time in a year that the EU rejected a large shipbuilding combination after objecting to the proposed combination between FINCANTIERI S.p.A. and Chantiers de l’Atlantique prompting the Italian and French yards to withdraw their proposal in January 2021.

Korea Shipbuilding & Offshore Engineering Co., Ltd. (KSOE) & Offshore Engineering (KSOE) filed for the review of the proposed merger in November 2019. The company said that it would become the parent of the two shipyard companies and that they would continue under independent management while KSOE would focus on future technologies and strategies for the companies. KSOE asked for approval for the plan from the EU, China, Singapore, Japan, and Kazakhstan.

So far, only China, Singapore, and Kazakhstan approved the combination with the South Korean authorities reportedly waiting for the EU. Japan’s intentions also remain unknown.

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