Hyundai Heavy Industries Group will transfer its LNG ship building technology to the medium-sized shipbuilders to facilitate its merger with Daewoo Shipbuilding & Marine Engineering.
Hyundai Heavy Industries Group is planning to transfer its LNG ship building technology to the medium-sized shipbuilders including STX Offshore & Shipbuilding and Hanjin Heavy Industries. This is to submit the demonopolization plan to the European Commission, which is conducting a business combination review on Hyundai Heavy Industries and Daewoo Shipbuilding & Marine Engineering.
Last year, the European Commission told Hyundai Heavy Industries to work on a method to remove the possibility of limited competition in the LNG ship market. This implies that the commission will approve the merger only when the possibility of its monopoly in the LNG ship building market is eliminated.At present, the combined share of Hyundai Heavy Industries and Daewoo Shipbuilding & Marine Engineering in the market amounts to 70 percent. LNG ships are highly profitable and require technological finesse and the South Korean shipbuilders are dominating the market. LNG ships built by Chinese companies recently showed various technological defects and the popularity of such ships built by the South Korean companies is further increasing.
Hyundai Heavy Industries and Daewoo Shipbuilding & Marine Engineering announced their merger plan in 2019. South Korea, the European Union and Japan are currently examining the plan and China, Kazakhstan and Singapore already approved the merger. The European Union is expressing concerns over the possibility that the merger would lead to a mega shipbuilder and less bargaining power in the LNG ship market. “It is said that Hyundai Heavy Industries Group and the European Union are continuing with their negotiations and the competition authorities of South Korea and Japan are likely to be affected by the European Commission’s decision,” said an industry source.
(Source: Business Korea)