Hanwha Group plan to take over DSME awaits approval from EU, Korea

Hanwha Group’s plan to take over Daewoo Shipbuilding & Marine Engineering (DSME) got the green light from Singapore and China one right after another, leaving only the European Union and its home country pending decisions on the acquisition.

Daewoo Shipbuilding & Marine Engineering (DSME)'s Okpo shipyard in South Gyeongsang [YONHAP]

Hanwha Group’s plan to take over Daewoo Shipbuilding & Marine Engineering (DSME) got the green light from Singapore and China one right after another, leaving only the European Union and its home country pending decisions on the acquisition.

According to Hanwha and DSME on Thursday, Singapore approved Hanwha's plan to take over Daewoo Shipbuilding on Wednesday. The latest approval came just one day after China gave its approval.

Hanwha announced its plan to buy the troubled Korean shipbuilder in September last year.

The takeover plan got the go-ahead from six out of eight countries, with Turkey being the first to approve the plan last month, followed by Britain, Japan and Vietnam.

It is now pending approval from Korea and the European Union.

The European Commission named a provisional deadline of April 18 for its decision on the takeover deal on its website. The antitrust arm of the European Union in 2022 vetoed a bid for DSME by Hyundai Heavy Industries over concerns of Korean shipbuilders’ possibly monopolizing the LNG carrier market.

Yet Korea's Fair Trade Commission (FTC) has not given a clear position on its decision, leaving questions as to whether the acquisition will be able to be finished as planned within April.

The FTC began to review the takeover plan on Dec. 19 last year. The review period is 30 days from its notification, but can be extended up to 120 days.

According to industry sources, Korea’s antitrust regulator is considering the proposed acquisition as it anticipates a vertical integration between Hanwha’s businesses and DSME. It reportedly pointed to Hanwha’s manufacturing and supplying munitions and weapon systems mounted on vessels and submarines built by DSME.

“I believe the takeover will likely succeed, as the main business portfolios of Hanwha do not overlap with those of DSME unlike how they did with Hyundai Heavy and DSME,” a source from the shipbuilding industry told the Korea JoongAng Daily on Thursday.

Once it gets approval, Hanwha Group will acquire a 49.3 percent stake and managerial control in DSME through a 2-trillion-won ($1.5 billion) investment.

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