According to latest sources, Japan is conducting a review of a proposed merger between Hyundai Heavy Industries Group and Daewoo Shipbuilding & Marine Engineering (DSME).
The Japan Trade Fair Commission has reportedly already started the first stage of a review with regards to a business combination between Hyundai Heavy Industries Group and DSME, after it received a proposal from Korea Shipbuilding & Offshore Engineering (KOSE) on Feb. 25.
KOSE allegedly submitted the merger plan to Japanese commission in September last year. Sources suggest should Japan proceed to the second round of the review like fair trade authorities in Singapore and the EU, they will reach a conclusion in the second half of the year.
Japan had issued a complaint against DSME in November 2018 at the World Trade Organization (WTO). In its allegation, Japan stated that DSME had distorted the market prices by taking shipbuilding orders at low prices. The episode particularly followed the injection of the Korean government of about 1.2 trillion won in public funds in the ship manufacturing company.
Reports further suggest, bilateral talks were held between the two parties in Seoul in December of the same year, during which Japan withhold its request to build a WTO panel. With the WTO, Japan filed another complaint in February this year. It further also added that public funds provided by the Korean government to the ship industry were unfair subsidies.
Latest report suggest the merger process between Hyundai Heavy Industries Group with DSME will be postponed until end of the year, which was originally to take place in the first half of this year.
The Hyundai Heavy Industries Group’s merger plan is presently reviewed by fair trade authorities in five countries. These include: the EU, Singapore, Korea, Japan, and China. Kazakshtan has so far been the only country to have approve it.