FTC meets to discuss Hanwha's DSME takeover

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FTC meets to discuss Hanwha's DSME takeover

Published: 26 Apr. 2023, 18:58 Updated: 26 Apr. 2023, 19:32

Korea's Fair Trade Commission [YONHAP]

Korea's antitrust regulator convened a meeting to deliberate on Hanwha's acquisition of Daewoo Shipbuilding & Marine Engineering (DSME) on Wednesday.

A decision may be announced this week at the earliest.

Five Hanwha companies — including Hanwha Aerospace, Hanwha Systems, Hanwha Impact Partners, Hanwha Energy Singapore and Hanwha Convergence — announced a plan to buy the troubled Korean shipbuilder last September worth 2 trillion won ($1.53 billion).

Since then, the takeover deal has obtained approval from seven out of eight necessary antitrust authorities so far, including Turkey, Britain, Japan, Vietnam, China, Singapore and the European Union, with Korea being the last to make a decision.

The decision to approve the corporate merger or to impose corrective measures is determined based on the majority opinion of the nine commissioners present, including the Fair Trade Commission (FTC) chairman and vice-chairman.

Industry insiders believe that Hanwha's acquisition of DSME will be conditionally approved by the Korean antitrust watchdog.

The review report on the takeover deal submitted earlier by the FTC examiners said the merger would be approved on the condition of implementing corrective measures preventing unfair competition in the naval market.

Some domestic shipbuilders, including HD Hyundai, raised concerns with the FTC about the possibility of DSME having an unfair advantage in bids for military contracts if it is purchased by defense-focused Hanwha.

Yet relevant government agencies, such as the Ministry of Trade, Industry and Energy and the Defense Acquisition Program Administration, dismissed the concerns in opinions submitted to the FTC, according to reports citing unnamed sources.

Once the merger is approved, Hanwha companies will acquire a 49.3 percent stake and management rights in DSME by purchasing the shipbuilder's new shares through a rights offering.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]