Fair Trade Commission Grants Conditional Approval for HD Joseon Haeyang's Acquisition of STX Junggong업

Imposition of Conditions Such as Prohibition of Supply Refusal and Price Increases

The Fair Trade Commission has approved HD Hyundai Heavy Industries' acquisition of STX Heavy Industries. However, conditions such as a prohibition on refusal to supply ship engine parts (CS) for three years, minimum quantity guarantees, and price increase restrictions were imposed.

On the 15th, the Fair Trade Commission announced, "We approve the corporate merger in which Hyundai Heavy Industries acquires 35.05% of the shares of STX Heavy Industries." This merger involves the corporate group HD Hyundai, which has achieved vertical integration across the shipbuilding industry including ships, ship engines, and engine parts, acquiring STX Heavy Industries and its subsidiaries, which operate in the ship engine and engine parts business.

The Fair Trade Commission conditionally approved Hyundai Heavy Industries' acquisition of STX Heavy Industries because it judged that this merger could restrict competition in the domestic ship engine market.

It was considered that this merger could realistically raise concerns that competitive engine companies such as Hanwha Engine and STX Engine might not receive the essential ship engine component, the crankshaft, in a timely manner, thereby hindering timely engine production.

Accordingly, the Fair Trade Commission established safeguards such as a prohibition on refusal to supply, minimum quantity guarantees, price increase restrictions, and prohibition of delivery delays for three years to ensure stable supply of crankshafts to competing engine companies, and allowed for extension of the period considering future market conditions.

The Fair Trade Commission evaluated, "While maintaining the original purpose of the merger company to strengthen competitiveness in the global engine market through investment in eco-friendly engines, we have established minimum safeguards for competing engine companies," and added, "It is significant in that it ensures fair competition in the shipbuilding industry, a national key industry, and related intermediate goods markets."