Hyundai Heavy working to ease regulators' concerns over merger
SEOUL : Hyundai Heavy Industries Holdings said yesterday it is working with Singaporean regulators to alleviate concerns of its US$2 billion (S$2.7 billion) merger with rival shipbuilder Daewoo crimping competition in the South-east Asian maritime hub.
Plans to combine the world's two biggest shipbuilders announced in January require regulatory approval in South Korea, Singapore, China, Japan, Kazakhstan and the European Union, a Hyundai spokesman told Reuters.
So far, only Kazakhstan has approved the deal, he said.
"We believe Singaporean authorities are taking a cautious approach to make a decision about the deal between the two big market players," the spokesman said.
"We will do our best to complete this well," he said, referring to Singapore's review.
He did not give details on how the firm is addressing Singapore's concerns.
Daewoo Shipbuilding and Marine Engineering Co Ltd declined comment beyond saying Hyundai is leading the regulatory approval process.
Singaporean regulators have said the deal between the two South Korean firms threatens to remove competition in the supply of liquefied natural gas (LNG) carriers, container ships and oil tankers to Singaporean customers.
"There are concerns that the Proposed Transaction will remove competition between two main suppliers of these commercial vessels, to the detriment of customers in Singapore," the Competition & Consumer Commission Singapore said in statement.
The regulator also said there were concerns over whether other suppliers will be able to compete with the new entity, and that barriers to entry for new players and expansion, particularly with regards LNG carriers, may be high. - REUTERS