London, Thursday, 13 January 2022 -
The European Commission announced on Thursday that it had banned a $2 billion shipbuilding merger between Hyundai and Daewoo.
According to an EU Commission statement, "the merger between the two South Korean shipbuilders would have created a dominant position for the new merged business and restricted competition in the global market for the building of large liquefied natural gas (LNG) carriers."
Large LNG tankers are critical in the LNG supply chain and enable its transportation around the world, according to European Commission Executive Vice-President Margrethe Vestager, who is in charge of competition policy.
"LNG adds to the diversification of Europe's energy sources and, as a result, increases energy security," she said, claiming that the combination would have resulted in a monopoly in the global market for the construction of big LNG tankers, which are in high demand from European carriers.
"Because no remedies were filed, the merger would have resulted in fewer suppliers and increased prices for large LNG vessels. This is why we refused to allow the merger to take place "she clarified.
The acquisition of Daewoo Shipbuilding & Marine Engineering Co Ltd by Hyundai Heavy Industries Holdings, which was first announced in 2019, would have established the world's largest shipbuilder with a market share of more than 60%.
According to the statement, the global market for the construction of large LNG carriers has reached €40 billion ($45.9 billion) in the last five years, with European customers accounting for nearly half of all orders.
(Research and edit by: The Decision Maker in London and Brussels)