Hyundai Heavy Industries' (HHI's) acquisition of rival South Korean shipbuilder Daewoo Shipbuilding & Marine Engineering Co (DSME) has been delayed again, according to stock exchange filings on 30 September.
Korea Shipbuilding & Offshore Engineering, the holding entity of the HHI Group, said on the Korea Exchange that the transaction's deadline had been moved from the end of September 2021 to the end of this year.
This is the fifth delay since the acquisition was agreed by HHI and DSME in March 2019.
The continuing hold-up is caused by the requirement to secure foreign regulatory approvals for the transaction.
Earlier this year, the European Union (EU) confirmed that the “clock had stopped” on its review of the acquisition, with the halt linked to the EU's requests for additional information about the deal.
The EU is concerned about the possible monopolisation of the liquefied natural gas (LNG) industry – a sector in which both HHI and DSME are high-profile manufacturers.
HHI said on announcing the acquisition in 2019 that the deal would require regulatory approval from states where the two companies have prominent profiles.
China, Kazakhstan, and Singapore have approved the transaction; however, approvals from the EU, Japan, and South Korea are pending. The EU approval is regarded as crucial for supporting similar decisions in Japan, and South Korea.
In terms of naval shipbuilding, the acquisition will result in an amalgamation of South Korea's two biggest shipyards with estimated annual defence-related revenues of more than USD2 billion.
HHI and DSME have capabilities to build large surface combatants, submarines, and associated equipment such as engines and electronics.
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