/Brussels vetoes Daewoo and Hyundai merger
Brussels vetoes Daewoo and Hyundai merger

Brussels vetoes Daewoo and Hyundai merger

The European Commission rejected the acquisition of Daewoo by Hyundai for violating competition rules, announced this Thursday, Margrethe Vestager, European Commissioner for Competition.

The merger between the two South Korean companies was valued at around 1.7 billion euros and Hyundai’s intention would be to become one of the largest shipbuilders in the world. If the deal were approved, Hyundai would have the monopoly of shipbuilding with 60% of the market share.

The decision of the European Commission comes at a time when energy prices in Europe are increasing and, currently, the two companies rivals Daewoo Shipbuilding & Marine Engineering and Hyundai Heavy Industries are already important ship suppliers to the European Union and represent around 30% of global demand for cargo ships.

The Brussels decision is also due to the fear of dominating the liquefied natural gas transport market, at a time when energy prices are rising in Europe.

“This is a very rare decision” emphasizes Vestager during the press conference, recalling that “in the last decade, only ten mergers of companies were vetoed” out of a total of “three thousand authorizations”.

The European Commission was notified of the intention to merge the companies on November 12, 2019, and was subsequently , analyzed immediately raising doubts to Bruxe las that required companies to present solutions to comply with competition laws.

At that time, Hyundai proposed not to raise prices of ships carrying liquefied natural gas, but did not convince Brussels.

The merger has already been approved by regulators in Singapore, China and Kazakhstan, but for the deal to be concluded, the approval of Brussels, Japan and South Korea would be necessary.

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