Hyundai Heavy Industries signs deal to take over Daewoo Shipbuilding and Marine Engineering
- 5 years ago
산은-현대중, 대우조선 민영화 오늘 본계약 체결
Hyundai Heavy Industries, one of the largest shipyards in the world, has formally inked an agreement to acquire local rival Daewoo Shipbuilding and Marine Engineering.
The deal may be sealed, but the acquisition process isn't likely to be smooth-sailling.
Oh Soo-young explains why.
Hyundai Heavy Industries has sealed the deal to acquire local rival Daewoo Shipbuilding and Marine Engineering,... growing its stake in the global market to some 21 percent.
Hyundai held a signing ceremony on Friday,... with Daewoo's largest shareholder Korea Development Bank.
Under the deal,... Hyundai Heavy Industries is set to create a holding company to manage shipbuilding units including Daewoo Shipbuilding.
KDB will transfer its current shares in Daewoo to the new company,... becoming the second largest shareholder with an 18 percent stake, following Hyundai Heavy Industries' 26 percent stake.
The takeover comes as shipbuilding companies are still reeling from a global downturn in the industry,... leading to financial troubles and wide-scale layoffs.
Daewoo has been struggling financially for over two decades,... with its parent Daewoo Group having gone bankrupt after the 1997 financial crisis.
The ailing company has received around 8-point-8 billion dollars of bailout loans and public funds since 2015.
The acquisition aims to stabilise the country's shipbuilding sector,... by easing competition and excess capacity,... while helping grow competitiveness amid increased competition from other Asian countries.
It would also create two dominant shipbuilders in Korea -- Hyundai Heavy Industries and Samsung Heavy Industries.
However, some challenges still remain.
Due to the sheer size of the market share that the envisioned entity would hold,... fair trade authorities in Korea as well as trading partner countries would have to determine whether the acquisition meets anti-trust regulations.
Also, unionised workers of both companies have fiercely opposed the takeover,... expressing fears of massive layoffs.
Hyundai Heavy Industries and Korea Development Bank released a joint statement on Friday,... saying they plan to retain Daewoo's independent management structure,... while assuring workers that their jobs are secure.
They added subcontractors and affiliated firms will also be retained.
Oh Soo-young, Arirang News.
Hyundai Heavy Industries, one of the largest shipyards in the world, has formally inked an agreement to acquire local rival Daewoo Shipbuilding and Marine Engineering.
The deal may be sealed, but the acquisition process isn't likely to be smooth-sailling.
Oh Soo-young explains why.
Hyundai Heavy Industries has sealed the deal to acquire local rival Daewoo Shipbuilding and Marine Engineering,... growing its stake in the global market to some 21 percent.
Hyundai held a signing ceremony on Friday,... with Daewoo's largest shareholder Korea Development Bank.
Under the deal,... Hyundai Heavy Industries is set to create a holding company to manage shipbuilding units including Daewoo Shipbuilding.
KDB will transfer its current shares in Daewoo to the new company,... becoming the second largest shareholder with an 18 percent stake, following Hyundai Heavy Industries' 26 percent stake.
The takeover comes as shipbuilding companies are still reeling from a global downturn in the industry,... leading to financial troubles and wide-scale layoffs.
Daewoo has been struggling financially for over two decades,... with its parent Daewoo Group having gone bankrupt after the 1997 financial crisis.
The ailing company has received around 8-point-8 billion dollars of bailout loans and public funds since 2015.
The acquisition aims to stabilise the country's shipbuilding sector,... by easing competition and excess capacity,... while helping grow competitiveness amid increased competition from other Asian countries.
It would also create two dominant shipbuilders in Korea -- Hyundai Heavy Industries and Samsung Heavy Industries.
However, some challenges still remain.
Due to the sheer size of the market share that the envisioned entity would hold,... fair trade authorities in Korea as well as trading partner countries would have to determine whether the acquisition meets anti-trust regulations.
Also, unionised workers of both companies have fiercely opposed the takeover,... expressing fears of massive layoffs.
Hyundai Heavy Industries and Korea Development Bank released a joint statement on Friday,... saying they plan to retain Daewoo's independent management structure,... while assuring workers that their jobs are secure.
They added subcontractors and affiliated firms will also be retained.
Oh Soo-young, Arirang News.