South Korea's Fair Trade Commission (FTC) has approved Hanwha Group's proposed acquisition of a controlling stake in Daewoo Shipbuilding & Marine Engineering (DSME), one of the nation’s so-called 'Big Three' offshore and marine contractors, according to Upstream.
The FTC last week approved a deal whereby Hanwha Group subsidiaries would acquire for 2 trillion won ($1.49 billion) a 49.3% stake in loss-making DSME from the contractor’s largest shareholder, the state-run Korea Development Bank (KDB).
The FTC had been the last potential stumbling block for the takeover, with formal approvals having already been received from anti-competition bodies in jurisdictions including the European Union, Japan, China, Singapore and the United Kingdom.
The commission’s approval for Hanwha’s acquisition is conditional but these conditions relate mainly to the construction of naval vessels and associated equipment and technologies.
Hanwha last year moved to snap up DSME after compatriot offshore and marine contracting giant Hyundai Heavy Industries had failed at the last hurdle in its own $1.8 billion acquisition attempt.
Despite having received the green light from anti-competition agencies in nations including Singapore, Kazakhstan and China, the European Commission (EC) in January 2022 vetoed the deal and Hyundai’s subsequent appeal was unsuccessful.
Hyundai argued that regulators in other regions had accepted the shipbuilding industry was a market controlled by clients’ orders and preferences, not market share, and so its proposed acquisition would not hurt competition.
Local media have reported that DSME is to be renamed Hanwha Ocean, but the official line is that no decision will be made until the acquisition has been completed.
The KDB had earlier acquired its significant stake in DSME as a de facto bailout in the wake of the 2008 Asian financial crisis.