Sunday, February 5, 2023
spot_img
HomeFinance & EconomyEU resumes probe of KSOE-DSME merger

Subscribe

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.

[koreajoongangdaily]

Related Posts

Video

Finance & Economy
Shipping News
Ports

Keppel Corp posts 9% drop in full-year profit

Singapore’s Keppel Corp said on Thursday its net profit for the year fell 9%, partly hurt by weak performance from its urban development business...

Stolt-Nielsen sees Q4 profits rise on strong markets

Stolt-Nielsen Limited reported unaudited results for the fourth quarter and full year 2022. The Company reported a fourth-quarter net profit of $95.3 million, with revenue...

Euronav delivers better-than-expected Q4 revenue

Euronav NV reported its non-audited financial results for the fourth quarter ended 31 December 2022. Hugo De Stoop, CEO of Euronav said: “Constrained vessel supply...

Wartsila: A challenging year with strong annual growth

HIGHLIGHTS FROM OCTOBER–DECEMBER 2022 Order intake decreased by 24% to EUR 1,638 million (2,150)Service order intake increased by 6% to EUR 791 million (747)Net sales...

Hapag-Lloyd achieves extraordinarily strong result in its anniversary year 2022

On the basis of preliminary and unaudited figures, Hapag-Lloyd has concluded the 2022 financial year – in which it celebrated its 175th anniversary –...

Baltic index hits over 2-year trough on waning demand for larger vessels

The Baltic Exchange’s dry bulk sea freight index dropped to its lowest level in...

Luxury Cruise Market Holds Much Promise For Greek & East Med Hidden Gem Destinations

The appeal of Greece and the East Mediterranean as an ideal region for luxury...

Baltic index falls to over 2-year low as larger vessel rates slide

The Baltic Exchange’s dry bulk sea freight index fell to its lowest since June...

Baltic index logs worst month in 3 years

The Baltic Exchange’s main sea freight index registered its biggest monthly percentage fall in...

Baltic index snaps 9-day losing streak as panamax, supramax rates rise

The Baltic Exchange’s main sea freight index snapped its nine-session losing streak on Tuesday,...

DP World wins bid for development of a mega-container terminal at India’s Deendayal Port

DP World has won a major concession to develop, operate and maintain the mega-container terminal at Deendayal port in Gujarat, on the western coast...

Luxury Cruise Market Holds Much Promise For Greek & East Med Hidden Gem Destinations

The appeal of Greece and the East Mediterranean as an ideal region for luxury cruising will be one of the main highlights of the...

Port of Los Angeles proposes cruise terminal project

The Port of Los Angeles is inviting comments on a draft Request for Proposals (RFP) for the future development of a new Outer Harbor...

Port of Long Beach Closes 2022 with Second-Busiest Year

The Port of Long Beach marked its second-busiest year on record by moving 9.13 million twenty-foot equivalent units in 2022, allowing for a return...

Hapag-Lloyd AG acquires share in J M Baxi Ports & Logistics Limited

Hapag-Lloyd AG signed a binding agreement today under which it will acquire 35% of J M Baxi Ports & Logistics Limited (JMBPL) from a...