South Korea’s antitrust chief has said the government will make a reasonable decision on the acquisition of Daewoo Shipbuilding & Marine Engineering Co. by Hyundai Heavy Industries Co., which could lead to the creation of the world’s largest shipbuilding group.
Kim Sang-jo, head of the Fair Trade Commission (FTC), said Monday that the commission will decide on the issue quickly in a way that can serve as a reference for antitrust regulators of other countries.
“A key issue is to make antitrust regulators of other countries accept our judgment,” Kim said in a meeting with South Korean reporters in Brussels, where he was visiting, noting it is meaningless if other countries do not approve the acquisition.
Hyundai Heavy’s acquisition of Daewoo Shipbuilding is subject to approval in South Korea as well as by antitrust regulators of other countries that can be affected by the acquisition.
An official handling the issue at the commission said it may take more than 120 days before the antitrust regulator can make a decision on whether to approve the acquisition.
Last week, Hyundai Heavy Industries, the world’s largest shipbuilder by sales, signed a formal deal with South Korea’s state-run Korea Development Bank to buy its smaller local rival, Daewoo Shipbuilding & Marine Engineering.
Under the deal estimated at over 2 trillion won (US$1.78 billion), KDB will hand over its 55.7 percent stake in Daewoo Shipbuilding to an entity to be set up later by Hyundai Heavy, in return for 1.25 trillion won worth of stocks to be sold later by the entity.
Hyundai Heavy will also chip in a total of 2.5 trillion won in the entity, which will be used to repay Daewoo Shipbuilding’s debts, according to Hyundai Heavy.
Hyundai said the entity will hold a roughly 68-percent stake in Daewoo Shipbuilding, with KDB becoming the second-largest shareholder.