Hyundai Heavy to seek nod for deal from Japan

Hyundai Heavy Industries Group said Thursday it will submit a regulatory approval application for its takeover of local rival Daewoo Shipbuilding & Marine Engineering to Japanese authorities as planned amid an escalating trade spat between the countries.

Tensions between Korea and Japan have been escalating after Tokyo imposed restrictions on exports of three high-tech materials vital to the manufacturing of semiconductors and displays on July 4. Japan is also expected to remove Korea from its list of trusted trade partners on Friday.

Against this backdrop, concerns were growing that Hyundai Heavy’s plan to get approval from the Japanese antitrust regulator for its proposed takeover of Daewoo Shipbuilding may take a hit.

The Korean shipbuilder said it will submit the application as planned.

“It’s not right for us to talk about the situation between South Korea and Japan,” a Hyundai Heavy spokesman said. “But we can say that we’ll submit the merger application to Japan as scheduled. We’re currently preparing for application and will be ready to explain our plan under its process.”

In March, Hyundai Heavy signed a formal deal, worth an estimated 2 trillion won ($1.7 billion), with the state-run Korea Development Bank (KDB) to buy Daewoo Shipbuilding. The bank is the largest shareholder of Daewoo Shipbuilding, with a controlling 55.7-percent stake in the company.

Winning regulatory approval from domestic and foreign corporate regulators has been regarded as a key hurdle facing Hyundai Heavy’s efforts to complete the acquisition of Daewoo Shipbuilding, since the tie-up of the two major shipyards could reshape the global shipbuilding landscape with their dominant market position.

Hyundai Heavy said last month it will first seek approvals from antitrust regulators in Korea, China, Japan, Kazakhstan and the European Union. So far, the shipbuilder submitted the request to Korea and China.

An objection from one country could derail Hyundai Heavy’s bid to bring Daewoo Shipbuilding under its wing.

Korea’s Financial Services Commission (FSS) released a statement asking Japanese authorities to be unbiased on the issue.

Yonhap