Monday, January 30, 2023
spot_img
HomeHeadlinesEU set to block HHI's $2 bil. acquisition of DSME - report

Subscribe

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

EU set to block HHI’s $2 bil. acquisition of DSME – report

Despite Hyundai Heavy Industries’ (HHI) submission of a number of solutions to address concerns over fair competition among large container vessel builders, the European Union has reached a consensus to block its proposed acquisition of Daewoo Shipbuilding & Marine Engineering (DSME), two sources involved with the matter said Tuesday.

“Several rounds of tough discussions between HHI and EU antitrust regulators have taken place specifically regarding the possible impact of the deal on the big container ship and LNG (liquefied natural gas) carrier segments. But the EU remains concerned that the HHI-DSME deal won’t ensure fair market competition in these profitable shipbuilding sectors over the long term. Therefore, its members reached a consensus to block the proposed acquisition,” one source based in Europe told The Korea Times.

When asked about the details of the remedies HHI presented to the EU, the source said, “HHI was said to have pledged to not inflate the price of large container and LNG ships for a certain period and to work closely with major European shippers in terms of stabilizing both the EU’s internal and external freight trade.”

HHI is estimated to pay around $2 billion to acquire DSME. But because the transaction will help HHI become the world’s top shipbuilder with a 21 percent market share, getting approval from top international antitrust regulators is mandated. HHI received approval of the deal from some countries but the EU holds the key because Europe’s shipping companies are the top customers of both DSME and HHI and represent 30 percent of global demand for cargo vessels.

Well aware that cargo shipbuilding is a crucial industry for the entire EU, HHI tried to persuade its antitrust regulators that the merged entity wouldn’t have outsized bargaining power, which could hurt the interests of European customers. The Korean firm also vowed to help European shipbuilders and shippers by sharing some patented technology and know-how to lower the barriers for entry into the large container ship market.

“As far as I know, HHI’s holding company considered separating some of its affiliates to show its willingness to maintain its business size and not to seek bulky external growth. But these proposals also failed to impress the EU’s antitrust regulators,” a government source said.

Details of the deal were submitted to the EU in November 2019. Because it also awaits approval from South Korea, another focus is how the Korean government will view the deal with the head of the country’s antitrust regulator recently telling reporters that the agency will try to complete its review by the end of the year.

HHI said the company wasn’t in a position to discuss the specifics of the ongoing takeover review process, but stressed it’s been doing its best to get approval from the EU. Shares of HHI fell by 2.19 percent to end at 111,500 won on the KOSPI, the country’s main bourse, Tuesday.

Source: koreatimes.co.kr

Related Posts

Video

Finance & Economy
Shipping News
Ports

Oaktree looking at block sale of existing shares in Hafnia Limited

OCM Luxembourg Chemical Tankers S.à r.l. which is ultimately controlled by funds managed by Oaktree Capital Management L.P. (the "Seller") has retained Fearnley Securities,...

John Fredriksen Increases Stake in Euronav

Norwegian billionaire John Fredriksen has once again increased his stake in Belgian tanker company Euronav in wake of Frontline’s termination of its combination agreement...

First Citizens Bank Arranges $44.2 Million of Debt Financing for Navios Partners

First Citizens Bank announced that its Maritime Finance group, part of the CIT division, served as sole lead arranger on $44.2 million in debt...

Eagle Bulk Appoints Kate Blankenship to Board of Directors

Eagle Bulk Shipping Inc., one of the world’s largest owner-operators within the midsize drybulk vessel segment, announced that it has appointed A. Kate Blankenship...

Golar LNG: Unwind of majority of TTF hedges of 2023 and 2024 Dutch Title Transfer Facility exposure

Golar LNG Limited (“Golar”) announced that it has unwound the majority of its swap arrangements for its Dutch Title Transfer Facility (“TTF”) linked production...

Cyprus shipping making waves – report

Cyprus shipping, the steady driver of the economy, is sailing for better times, having...

Baltic index hits fresh multi-year lows on capesize dip

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

Baltic index falls for seventh session on lower capesize demand

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

Baltic index hits fresh 2-1/2-year low as larger vessel rates slip

The Baltic Exchange’s main sea freight index extended losses to a sixth straight session...

Baltic index down for fifth day on lower vessel rates

The Baltic Exchange’s main sea freight index fell for the fifth straight session on...

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...

Nigeria opens ‘game changer’ billion-dollar deep seaport

Nigeria opened a billion-dollar Chinese-built deep seaport in Lagos on Monday, which is expected to ease congestion at the country’s ports and help it...

SC Ports handles nearly 3 million TEUs in record 2022

South Carolina Ports had a record 2022 with the most containers ever handled at the Port of Charleston. SC Ports moved nearly 2.8 million TEUs...

January oil loadings from Russia’s Baltic ports set to jump 50% vs Dec

Urals and KEBCO crude oil loadings from Russia’s Baltic ports of Primorsk and Ust-Luga in January are set to rise by 50% from December...