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(Photo= Yonhap news) |
[Alpha Biz= Reporter Kim Sangjin] On the 15th, the Fair Trade Commission (FTC) conditionally approved HD Korea Shipbuilding & Offshore Engineering's acquisition of STX Offshore & Shipbuilding.
With this merger, HD Korea Shipbuilding & Offshore Engineering will dominate approximately 80% of the engine parts market and about 70% of the ship engine market, establishing itself as the leading entity in these sectors.
The FTC, after nearly 11 months of review, concluded that HD Korea Shipbuilding & Offshore Engineering's acquisition of a 35.05% stake in STX Offshore & Shipbuilding could potentially restrict competition in the domestic ship engine market. To address this concern, the FTC imposed corrective measures as conditions for approval.
These measures include obligations for HD Korea Shipbuilding & Offshore Engineering to ensure minimum supply quantities based on last year's contract volumes, and to refrain from unreasonably refusing supply requests or delaying deliveries for the next three years. Additionally, the FTC mandated that HD Korea Shipbuilding & Offshore Engineering must not increase prices above a certain threshold.
HD Korea Shipbuilding & Offshore Engineering's subsidiary, HD Hyundai Heavy Industries, produces ship engines, while STX Offshore & Shipbuilding's subsidiary manufactures critical components like crankshafts for these engines. The FTC emphasized that cutting off supply of crankshafts to other engine manufacturers could undermine fair competition in the market.
Currently, three companies in South Korea produce crankshafts: HD Hyundai Heavy Industries and KMCS (a subsidiary of STX Offshore & Shipbuilding), as well as Doosan Group's subsidiary, Doosan Engine. The engine manufacturing market includes competition among HD Hyundai Heavy Industries, Hanwha Engine, and STX Offshore & Shipbuilding.
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
