Mergers: Commission prohibits proposed acquisition of Daewoo Shipbuilding & Marine Engineering by Hyundai Heavy Industries Holdings
The European
Commission has prohibited, under the EU Merger Regulation, the acquisition of
Daewoo Shipbuilding & Marine Engineering CO., Ltd (DSME) by Hyundai Heavy
Industries Holdings (HHIH).
The merger between
the two South Korean shipbuilders would have created a dominant position by the
new merged company and reduced competition in the worldwide market for the
construction of large liquefied gas (‘LNG') carriers (‘LLNGCs').
The parties did not formally offer remedies to address the
Commission's concerns.
Executive
Vice-President Margrethe Vestager, in charge of competition policy, said:
“Large LNG vessels are an essential element in the supply chain of liquefied
natural gas (LNG) and enable the transport of this source of energy around the
globe. LNG contributes to the diversification of Europe's source of energy and
therefore improves energy security. The merger between HHIH and DSME would have
led to a dominant position in the global market for the construction of large
LNG vessels, for which there is significant demand from European carriers.
Given that no remedies were submitted, the merger would have led to fewer
suppliers and higher prices for large vessels transporting LNG. This is why we
prohibited the merger.”
