Hyundai Heavy Industries’ proposed takeover of rival Daewoo Shipbuilding & Marine Engineering to create the world’s biggest shipbuilder was hit with an EU veto on Thursday, January 13, on concerns that the deal would hurt competition.
Hyundai, one of the largest shipbuilders in the world, announced the deal in 2019 in part to tackle overcapacity in the sector, reported Reuters.
The shipyard, which sought EU antitrust approval for the takeover in November 2019, stated it may challenge the EU prohibition and criticized the regulator’s focus on market shares.
The South Korean industry ministry stated it regretted the EU decision on a deal already cleared by China, Singapore, and Kazakhstan.
The European Commission stated the deal would create the world’s largest shipbuilder with a combined market share of at least 60%, leaving few alternative suppliers for customers.
The EU competition enforcer said the tie-up would reduce competition in the global market for the construction of large liquefied gas (LNG) carriers.
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