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HHI seeks China regulatory approval for DSME merger

The world’s largest shipbuilder Hyundai Heavy Industries (HHI) in a key step towards its merger with Daewoo Shipbuilding & Marine Engineering (DSME) has applied for approval from the China State Administration for Market Regulation.

An official of Korea Shipbuilding and Offshore Engineering (KSOE), a subsidiary of HHI, said that the company has submitted an application for an enterprise combination review through a local consultant in China. The Chinese government will take up to 120 days to examine the acquisition.

The merger also requires regulatory approval from the Korea Fair Trade Commission, EU, Japan, China and Kazakhstan. HHI filed an application for the acquisition to Korea Fair Trade Commission on 1 July with a review period of up to 120 business days. Currently, the company is in pre-negotiations with the EU as well.

Korean side believes that China authority is likely to approve the merger between HHI and DSME considering that the two leading Chinese shipbuilding groups China State Shipping Corporation (CSSC) and China Shipbuilding Industry Corporation (CSIC) are also planning for consolidation.

In March this year, HHI signed the formal deal for the acquisition of DSME to create a new global giant in the shipbuilding sector. HHI established KSOE in June as the first step of its plan to merge with DSME.

Read more: Hyundai Heavy inks definitive agreement to acquire DSME

Earlier this month, China State Administration for Market Regulation approved MacGregor’s acquisition of TTS’s marine and offshore business after a lengthy review process that delayed the deal. The Chinese authorities approved the merger under additional restrictive conditions.