Hyundai Heavy Industries Group, South Korea’s top shipbuilder, said Wednesday it has started the process to receive regulatory approval in Japan for its takeover of local rival Daewoo Shipbuilding & Marine Engineering Co.
Hyundai Heavy said it is in the process of submitting a regulatory approval application to the Japan Fair Trade Commission.
The move came at a time when tensions between South Korea and Japan have been escalating after Tokyo imposed restrictions on exports of three high-tech materials vital to the manufacturing of semiconductors and displays in July and removed South Korea from its list of trusted trade partners last month.
In March, Hyundai Heavy signed a formal deal, worth an estimated 2 trillion won (US$1.6 billion), with the state-run Korea Development Bank (KDB) to buy Daewoo Shipbuilding. The bank is the largest shareholder of Daewoo Shipbuilding, with a controlling 55.7 percent stake in the company.
Winning regulatory approval from domestic and foreign corporate regulators has been regarded as a key hurdle facing Hyundai Heavy’s efforts 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 could derail Hyundai Heavy’s bid to bring Daewoo Shipbuilding under its wing.
So far, the shipbuilder has submitted the request to South Korea, China, Kazakhstan and Singapore. It is also in the preliminary process of submitting the application to the European Union.