South Korea's antitrust chief denied on Friday that he held talks with his European counterparts on the acquisition of Daewoo Shipbuilding & Marine Engineering Co. by Hyundai Heavy Industries Co.
Kim Sang-jo, head of South Korea's Fair Trade Commission, said in a parliamentary session that he was not in a position to consult with European antitrust regulators on the issue during his recent trip to Europe as he was not aware of details of the deal between the two South Korean shipbuilders.
Kim Sang-jo, head of South Korea`s Fair Trade Commission, speaks in a parliamentary session on March 29, 2019. (Yonhap)
"I did not mention the acquisition deal to any officials of European antitrust regulators," Kim said, noting that the shipbuilders have yet to report their acquisition deal to his commission.
Hyundai Heavy, the world's largest shipbuilder by sales, signed a formal deal with South Korea's state-run Korea Development Bank earlier this month to buy Daewoo Shipbuilding, the world's second-biggest shipbuilder by sales.
Hyundai Heavy is based in Ulsan, and Daewoo Shipbuilding is located in Geoje, South Korea.
Hyundai Heavy's acquisition of Daewoo Shipbuilding is subject to approval in South Korea as well as by the antitrust regulators of about 23 countries that may be affected by the takeover.
The deal, if approved, would create the world's largest shipbuilding group.
Kim has said that the commission will make a reasonable decision on the acquisition in a way that can serve as a reference for antitrust regulators of other countries, noting the merger agreement is meaningless if other countries do not approve the acquisition.
Andreas Mundt, President of Germany's Federal Cartel Office, told South Korean reporters earlier this month that a key issue in deciding the fate of the acquisition deal is whether the contract restricts competition.
Ricardo Cardoso, spokesperson for competition at the European Commission, told the South Korean reporters that continuation of competition and the deal's implications for consumers are key factors in whether to endorse the acquisition.
South Korean shipbuilders have struggled with an oversupply of vessels and declining orders since the 2008 financial crisis. (Yonhap)