Hanwha Group received approval from the European Union on its plan to buy Daewoo Shipbuilding & Marine Engineering Co., one of South Korea’s three biggest shipbuilders, bringing the conglomerate closer to completing the deal.
According to multiple sources in the industry on Monday, the European Commission approved the acquisition on March 31. The decision was made earlier than expected as the preliminary review results were originally slated to be notified on April 18.
Hanwha Group agreed last year to buy managerial control of Daewoo Shipbuilding and invest 2 trillion won ($1.5 billion) to acquire new shares of the shipbuilder to secure a 49.3 percent stake in the company after obtaining approvals from local and foreign anti-trust agencies.
The EU had earlier rejected the combination of Korea Shipbuilding & Offshore Engineering Co. and Daewoo Shipbuilding on concerns over their monopoly in building liquefied natural gas carriers. However, EU approved Hanwha’s control of Daewoo Shipbuilding, along with seven other foreign competition authorities that it is unlikely to limit competition in their countries.
Turkey was the first country to approve the acquisition in February, which was then followed by the approval from Japan, Vietnam, China and Singapore. The U.K. is also expected to give a nod once a review request is submitted.
Now Korea’s Fair Trade Commission needs to make its decision. The commission is looking into the risk of vertical integration between the defense divisions at Hanwha and Daewoo Shipbuilding. It sees that the acquisition will lead to vertical integration of weapons and equipment for naval ships and is collecting feedback from related sectors on the impact it will have on the market.
The commission said it will accelerate the review process to the greatest extent possible but cannot guarantee when the decision will be made. It began the assessment on Dec. 19. The review has to end within 30 days of the filing but can be extended up to 120 days.