BRUSSELS – World leading shipbuilding group Hyundai Heavy Industries Holdings’s $1.8 billion (R26.3 billion) merger with rival shipbuilder Daewoo will face a full-scale investigation in Europe due to serious EU antitrust concerns, two sources familiar with the matter said on Monday.
Hyundai in January announced the deal to create the world’s biggest shipbuilder with a 21 percent market share, in part a response to over-capacity in the industry.
The European Commission will launch an investigation into the deal next week following a preliminary review which ends on December 17, the sources said.
A full-scale investigation can take up to five months and in most cases ends with companies forced to sell off assets or transfer technology or contracts to rivals to address competition concerns.
The EU competition enforcer declined to comment. The deal also requires regulatory clearance in South Korea, Singapore, China and Japan. Kazakhstan has already given the green light. Hyundai last week said it was working with Singapore’s regulators to allay their concerns.