Hyundai Heavy Industries Group, South Korea’s leading shipbuilding conglomerate, said Wednesday it has submitted an application to the European Union (EU) for approval for its proposed takeover of local rival Daewoo Shipbuilding and Marine Engineering Co.
Hyundai Heavy said its request will be reviewed by anti-trust authorities at the European Commission, with the result expected to come out next year. Hyundai Heavy has been taking prerequisite steps since April to apply for the EU’s mergers and acquisitions approval.
In March, Hyundai Heavy signed a formal deal, worth an estimated 2 trillion won (US$1.7 billion) to buy its smaller local rival from the state-run Korea Development Bank (KDB). The policy lender is the largest shareholder of Daewoo Shipbuilding, with a controlling 55.7 percent stake.
Winning regulatory approval from domestic and foreign corporate regulators is a key hurdle facing Hyundai Heavy’s bid to complete the acquisition of Daewoo Shipbuilding, since the tie-up of the two major shipyards could reshape the global shipbuilding landscape with their dominant market position.
An objection from one country or the EU could derail the takeover.
In addition to the EU, Hyundai Heavy’s acquisition deal is currently being reviewed by antitrust regulators in South Korea, Japan, China and Singapore. The group has so far earned regulatory approval from Kazakhstan.
Once the deal has received the relevant approvals and is completed, the South Korean shipbuilding giant will have four shipyards under its umbrella — Hyundai Heavy Industries, Daewoo Shipbuilding, Hyundai Samho Heavy Industries and Hyundai Mipo Dockyard.