EU to block $2bn Korean shipbuilding merger between Daewoo and Hyundai

EU competition officials are preparing to block a $2bn merger between two of the world’s biggest shipbuilders in South Korea, the first time since 2019 that Brussels has decided to veto a corporate tie-up.

The veto will be the first by the EU’s competition authorities since Brussels prevented a tie-up between India’s Tata Steel and Germany’s Thyssenkrupp more than two years ago over concerns it would drive up prices for consumers.

The latest decision comes as energy prices have soared in Europe this winter, with freight costs for liquefied natural gas in Asia rising to record levels of more than $300,000 per day on surging global demand.

The two South Korean companies dominate the market for making ships that carry super-chilled LNG. One EU official said blocking the merger would help protect European consumers from paying higher prices for LNG, which emits less carbon dioxide than coal but is still a source of greenhouse gas emissions.

Ships carrying LNG to Asia have been rerouted to Europe, where consumers are willing to pay a premium for the fuel to generate electricity. The EU is the world’s third-largest importer of LNG.

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