Competitor Opposition
Although Daewoo Shipbuilding & Marine Engineering (DSME) was sold off to Hanwha Group last year, approval from the Fair Trade Commission is being delayed due to opposition from a competitor which is not a foreign company but HD Hyundai Heavy Industries, a Korean company.
After Hanwha Group reported the business combination to the Fair Trade Commission on December 19 2022, HD Hyundai Heavy Industries filed objections to the sale of DSME to Hanwha Group on four occasions -- on December 29, 2022 and February 6, March 10 and March 24, 2023.
HD Hyundai Heavy Industries initially pursued the acquisition of DSME. Its attempt to take over fell through after EU competition authorities opposed the marriage between the two companies. Considerable criticism has arisen when this fact became known. HD Hyundai Heavy Industries’ opposition has led to economic losses for Korea including the loss of nationally important shipbuilding and defense personnel and the weakening of Korea’s submarine design capabilities.
HD Hyundai Heavy Industries is known to oppose Hanwha Group’s takeover of DSME, saying that there are concerns that defense affiliates of Hanwha Group will offer HD Hyundai Heavy Industries relatively high prices and discriminately provide technical information.
“Due to the structural characteristics of the Korean defense industry market where technology and prices are strongly managed by the Korean government as the end user, the possibility of the situation suggested by HD Hyundai Heavy Industries is extremely slim.” KDB said with regard to HD Hyundai Heavy Industries’ concern.
Some industry insiders believe that HD Hyundai Heavy Industry has been taking issue with the business combination to intentionally delay Hanwha Group’s acquisition of DSME in order to gain a competitive advantage.