Singapore competition regulator approves Daewoo shipbuilding, KSEO merger

Singapore’s state competition regulator approved the merger between two South Korean shipyards, possibly pushing forward the creation of the world’s largest shipbuilder, industry sources said Tuesday,

The Competition and Consumer Commission of Singapore said the planned merger between Korea Shipbuilding & Offshore Engineering Co., (KSOE) and Daewoo Shipbuilding & Marine Engineering Co. (DSME) did not violate any anti-trust rules or hurt fair competition in the sector.

The unconditional approval is the second of its kind for the ongoing business combination, following the similar verdict made by Kazakhstan in October, 2019.

KSOE, which is the sub-holding company of Hyundai Heavy Industries Group, submitted its merger request to the city state last September, with Singapore conducting first and second stage reviews.

“Initially Singaporean authorities did express reservations on fair competition and potential fallout for consumers, but these concerns were fully alleviated,” a KSOE official said.

The latest decision is expected to positively impact anti-trust reviews being carried out by the European Union, China and Japan.

In March 2019, Hyundai Heavy Industries signed a contract to buy a 55.72 percent stake in Daewoo Shipbuilding. The deal can lead to the creation of the world’s biggest shipbuilder with a global market share of around 21 percent.

To acquire DSME, Hyundai Heavy Industry Group reorganized Hyundai Heavy Industries with KSOE, a sub-holding marine engineering firm that governs shipbuilding units for the conglomerate, and made changes to Hyundai Heavy Industries Co.

KSOE currently manages the group’s three shipbuilding units — Hyundai Heavy Industries, Hyundai Mipo Dockyard Co. and Hyundai Samho Heavy Industries Co.

If the acquisition deal goes ahead, Hyundai Heavy Industries Group will have four shipbuilders under its wing.