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Hyundai Heavy starts process to seek regulatory approval for Daewoo takeover

Logistic News - Published on Tue, 16 Apr 2019

Image Source: Nikkei Asian Review
Hyundai Heavy Industries, the world’s largest shipbuilder, has started the process to seek approval from foreign regulators for its proposed takeover of Daewoo Shipbuilding and Marine Engineering Co. In March, Hyundai Heavy signed a formal deal, worth an estimated KWR 2 trillion (USD 1.75 billion), with state-run Korea development Bank to buy the smaller local shipbuilder. The bank is the largest shareholder of Daewoo, with a controlling 55.7% stake in the company. Hyundai Heavy said that it will submit a request asking for formal approval from South Korea’s Fair Trade Commission next month. That will be followed by similar requests being sent to antitrust watchdogs in 10 countries in June.

Winning regulatory approval from domestic and foreign corporate regulators has been regarded as one of key hurdles facing Hyundai Heavy’s efforts to complete the merger, given the dominant market position the newly merged company would have.

The sticking point is to win approval from European Union (EU) regulators, which have already said that approving any mergers between Hyundai Heavy and Daewoo depends on whether or not such a development hurts consumers. China and Japan, major competitors in the shipbuilding sector, also are expected to try to stall the approval process.

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Posted By : Rabi Wangkhem on Tue, 16 Apr 2019
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