Fair Trade Commission Approves Hyundai Genuine's Acquisition of Doosan Infracore

[Asia Economy Reporter Kwon Haeyoung] The Fair Trade Commission announced on the 27th that it has approved Hyundai Genuine's acquisition of 34.4% of Doosan Infracore's shares.

With this corporate merger, Hyundai Genuine will serve as an intermediate holding company that integrates and manages the construction machinery business division within the group.

The Fair Trade Commission noted that the combined market share of the two companies in the domestic excavator and wheel loader markets reaches 51.2% (excavators) and 66.0% (wheel loaders), and the gap with the second-largest competitor, Volvo, is widening, which meets the criteria for presumed competition restriction under the Fair Trade Act. However, it concluded that there is no overall concern about competition restriction.

The domestic excavator and wheel loader markets have experienced stagnant demand for a long time, while supply has been excessive, making it difficult to raise prices based solely on market share. Even if prices were increased, considering the high homogeneity between brands, sufficient competitive response capabilities, and the ease of importing foreign brands, it is expected that customers can easily switch to competitors' products.

The analysis of upward pricing pressure (UPP) showed no likelihood of price increases after the merger. Additionally, the relatively high import ratio and significant competition in the global market were also taken into account.

Furthermore, examining the vertical integration occurring among the domestic excavator, wheel loader, engine forklift markets, and eight component markets, it was judged that the possibility of blocking competitors' product purchasing or sales channels is low.