Tuesday, October 3, 2023
HomeFinance & EconomyEU resumes probe of KSOE-DSME merger


To our FREE newsletter
Get all the latest maritime news delivered straight to your inbox.

EU resumes probe of KSOE-DSME merger

The European Union’s antitrust regulator is resuming an investigation into a proposed merger of two Korean shipbuilders that it suspended last year.

The European Commission announced Monday that it is resuming a probe into Korea Shipbuilding & Offshore Engineering’s (KSOE) acquisition of Daewoo Shipbuilding & Marine Engineering (DSME). The probe is planned to be finalized by Jan. 20.

In 2019, KSOE signed a deal with the state-run Korea Development Bank (KDB) to take over DSME for $1.8 billion. DSME is 55.7 percent owned by the KDB.

KSOE is part of the world’s largest shipbuilding company, Hyundai Heavy Industries (HHI) Group, which has 16.6 percent of the current order backlog for ships globally. The HHI Group includes Hyundai Heavy Industries (HHI) and Hyundai Mipo Dockyard.

In terms of the world’s shipbuilding market, DSME ranks fourth for market share, 6 percent. Together, KSOE and DSME control more than 20 percent of the world’s shipbuilding market.

The European Commission halted its investigation into the acquisition several times in the past, citing a lack of data. The last time was in July 2020.

“The probe has been resumed because we sufficiently answered the questions by the European Union antitrust regulator,” said a spokesperson for KSOE. “We will do our best to receive approval from the authorities of the remaining three [regions] that include the European Union, Korea and Japan.”

The European Commission’s decision could affect the decisions of Korea and Japan.

Kazakhstan, Singapore and China already gave green lights to the acquisition.

The European Commission has expressed concerns that the deal could remove DSME as an essential competitive force in the markets for large container ships, oil tankers, liquefied natural gas and liquefied petroleum gas carriers, and possibly create monopolies in these segments, according to a report from Offshore Energy, a Netherlands-based trade publication.

DSME and HHI Group have 91 LNG carriers on order, which is around 60 percent of the world’s orders, according to VesselsValue, an online valuation and data provider based in London.

Analysts say a delayed decision by the European Commission is having an impact on DSME’s status in the market.

Uncertainties around the merger are “an obstacle” for DSME valuation, said Kim Hyun, an analyst at Meritz Securities. “If the EU continues to delay the approval, the deal could be canceled. The longer the decision is delayed, the worse DSME’s financial structure will become.”

DSME’s total liabilities as of the third quarter were 7.66 trillion won ($6.85 billion), up 19 percent from 6.45 trillion won as of the end of 2020. Its consolidated third quarter net loss was 54.48 billion won, up 86 percent from a 29.21 billion won net loss in the same quarter last year.


Related Posts


Finance & Economy
Shipping News

Scorpio Tankers takes options to buy back over 20 ships

In a relevant SEC filing, Scorpio Tankers announced extensive vessel repurchases via sale and leaseback arrangements, including for the 2016-built LR2 product tanker STI...

TOP Ships Announces Reverse Stock Split

TOP Ships announced that it has determined to effect a 1-for-12 reverse stock split of the Company’s issued common shares. The Company’s shareholders approved the...

Carnival Earnings Outlook Misses While Fuel Costs Near 15-Year High

Carnival Corp. posted a profit for the first time since 2020 but issued a fourth quarter earnings outlook that missed Wall Streets’ expectations as...

Sphinx Investment Corp Increases Stake in OceanPal

On September 28, 2023, an OceanPal SEC filing revealed that Sphinx Investment Corp. had raised its ownership in OceanPal, now holding a substantial stake...

Star Bulk Announces the Repurchase of 10 Million of Its Common Shares

Star Bulk announced that it entered into a Repurchase Agreement (with OCM XL Holdings, LP, a limited partnership incorporated in the Cayman Islands, pursuant...

MSC to buy 50% stake in Italian passenger rail group Italo

Shipping group MSC has entered into a binding agreement to acquire a 50% stake...

Higher capesize rates drive Baltic index higher

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk...

Baltic index snaps 4-day winning streak as capesize rates slip

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk...

Baltic index scales 11-month peak on strong capesize rates

The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying dry...

Baltic index scales over 9-month high on capesize surge

The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying dry...

Ukraine: 5 More Cargo Ships Head For Black Sea Ports – report

Five more ships are on their way to Ukrainian sea ports using a new corridor opened to resume predominantly agricultural exports, an alternative arrangement...

Piraeus Port reports strong H1 2023 results

The Piraeus Port Authority SA, which operates Greece’s biggest and busiest port, reported a 48.8-percent increase in pre-tax earnings for H1 2023 – 49.4...

Greece names Thessaloniki port operator preferred bidder for Volos port

Greece’s privatisation agency has named the operator of Thessaloniki port as the preferred bidder for acquiring a 67% stake in the port of Volos,...

Drewry: Port Throughput Index Down 2.1% in July

The Global Container Port Throughput Index fell 2.1% MoM in July 2023, with the small rises recorded in Africa and Oceania having been insufficient...

Vopak: Agreement with Infracapital on sale of Rotterdam chemical terminals

Vopak announces that it has reached an agreement with Infracapital on the sale of its three chemical terminals in Rotterdam (Botlek, TTR and Chemiehaven)...