European Commission Blocks Possible Mega Merger Partnership
After reviewing what would have been viewed as a mega merger partnership between two shipbuilding giants, the European Commission blocked its merger as the possibility would reduce competition in the market and potentially increase LNG carrier newbuild prices.
With this merger, Daewoo Shipbuilding & Marine Engineering (DSME) and Hyundai Heavy Industries (HHI) had the potential to become the largest shipbuilding company globally.
Executive Vice President Margrethe Vestager stated, “The merger between HHIH and DSME would have led to a dominant position in the global market for the construction of large LNG vessels, for which there is significant demand from European carriers. Given that no remedies were submitted, the merger would have led to fewer suppliers and higher prices for large vessels transporting LNG. This is why we prohibited the merger.”