EU antitrust watchdog worried about market power of Korean shipbuilders Combination will give two Korean shipbuilders 60% share in LNG shipbuilding market
Translated by Ryu Ho-joung 공개 2021-12-30 08:10:01
이 기사는 2021년 12월 30일 08:08 thebell 에 표출된 기사입니다.
Expectations are growing that the European Union’s antitrust regulator could reject Korea Shipbuilding & Offshore Engineering’s planned acquisition of Daewoo Shipbuilding & Marine Engineering, as it is concerned the combination could give the South Korean shipbuilders significant market power in Europe which is the largest market for both companies.The EU’s antitrust watchdog will give its decision on the business combination by January 20, 2022, according to industry sources.
The deal received unconditional antitrust approval from China, Singapore and Kazakhstan. The South Korean and Japanese antitrust regulators are also expected to finalize their decisions soon.
The planned acquisition will give the two South Korean companies a combined more than 60% share in the global liquid natural gas (LNG) shipbuilding market. The EU’s antitrust enforcer is said to have suggested that Korea Shipbuilding sell part of its LNG business to ease concerns about a reduction in competition.
But Korea Shipbuilding is understood to be unwilling to accept the EU’s suggestion because the point of the deal was to expand its foothold in the LNG shipbuilding market, which is continuing to grow on the back of rising demand for eco-friendly ships.
The European market, however, is important for both Korea Shipbuilding and Daewoo Shipbuilding, with four of the world’s top five shipping companies – Maersk, MSC, CMA CGM and Hapag-Lloyd – based in the continent.
Hyundai Heavy Industries, a key subsidiary of Korea Shipbuilding, received orders worth about 12 trillion won ($10 billion) from Europe this year, which accounted for the second largest share of the total after Asia, according to company reports. Daewoo Shipbuilding also secured 3.6 trillion won worth of orders from Europe, or the largest 30% of this year’s orders.
“European shipping companies are key customers for South Korean shipbuilders, which will clearly benefit from their growing demand for LNG ships,” a source said. “Chinese rivals are unlikely to catch up with South Korean players in the shipbuilding market in the short term.”
“The importance of the European market to South Korean shipbuilders is the reason behind the EU’s strong stance on the deal’s competition impact,” another source said. (Reporting by Doung Yang)
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