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The European Union announced this Thursday (01/13/2022) its veto on the merger of two giant South Korean shipyards. The veto threatens future access to the European market for the merged company. In a statement, the European Commission noted that the merger of Daewoo Shipbuilding & Marine Engineering and Hyundai Heavy Industries Holdings would create a “dominant position with the new company, and reduce competition in the global liquefied gas transportation market.”
The European Commissioner for Competition, Margrethe Vestager, told a press conference that the blockade of the mega-merger was decided “given the evidence of the negative effects” of the initiative. The European Commission technicians concluded that the merger would create a group that would have control of two thirds of the world market for liquefied gas transport vessels.
“European customers would be left with few alternatives to the merged entity, as only a handful of competitors would remain in the market,” Vestager warned. The official stressed that “it does not matter where the merged companies are located. What matters is whether they compete for demand in Europe.”
In a statement, Hyundai criticized the EU decision and opened the door for an appeal to the European justice. “The use of market share by the European Commission as an evaluation criterion has no probative value, since market share in itself is not an adequate indicator of the market power of the shipbuilding industry,” said the firm. (afp)
