Hanwha Group has cleared the final hurdle to take over Daewoo Shipbuilding & Marine Engineering. It has been 15 years since Hanwha first attempted to acquire the Korean shipbuilder in 2008.

The Korea Fair Trade Commission announced on April 27 that it has approved the merger in which five Hanwha Group affiliates will acquire a 49.3 percent stake in DSME on condition of the imposition of corrective measures. The approval came more than four months after Hanwha filed the merger in December 2022 and the KFTC conducted an examination including four requests to supplement the filing.

The corrective measures are mainly about prohibiting Hanwha, a ship parts maker, from discriminating against other companies in ship parts prices or selectively providing technical information in competition with rival companies in a tender that DSME, a shipbuilder, conducts. They also prohibit Hanwha from providing trade secrets obtained from competitors to its affiliates to substantially hinder fair competition. Hanwha and DSME must comply with these corrective measures for three years and semi-annually report the status of the implementation of the corrective measures to the KFTC.

Hanwha also agreed to comply with the corrective measures. “Despite management constraints imposed by the conditional approval, we have decided to accept the KFTC’s decision in order to normalize the business of DSME that has business performances that have deteriorated and boosting Korea’s national competitiveness by fostering the shipbuilding industry, one of the nation’s key industries,” a Hanwha representative said on the same day. Hanwha plans to comply with the corrective measures outlined by the KFTC, which include prohibiting price and information discrimination for some ship parts.

DSME’s new name is highly likely to become Hanwha Ocean. The first CEO is expected to be Kwon Hyuk-woong, head of Hanwha’s support division, a close associate of Hanwha Chairman Kim Seung-youn.

Hanwha’s strategy is to realize the early normalization of DSME’s management and grow DSME into a global innovative company that pioneers a sustainable marine energy ecosystem by combining the group’s core competencies with DSME’s world-class design and production capabilities. The company is planning not only to generate profits and create jobs but to sharpen Korea’s national competitiveness by expanding Korea’s defense exports.

Source: Business Korea