Unexpected Hurdle
The organized labor unions of the four subsidiaries of the Samsung Group scheduled to be acquired by the Hanwha Group are opposed to the takeover. In addition, the possibility of a monopoly and a violation of the Fair Trade Act is being mentioned concerning some chemical items.
“If the employees of the four companies continue to be opposed to the deal, the domestic petrochemical industry will have to miss out on the rare voluntary restructuring opportunity,” Hanwha commented, adding, “The current situation will affect not only the business consolidation between the two groups, but also the domestic petrochemical sector as a whole.”
Samsung Techwin, Samsung Total and Samsung General Chemicals set up their labor unions for the first time at this time. Samsung Thales organized an emergency planning committee to join the first rally against the merger on January 6. Hanwha has promised that it would keep hiring the employees of the four and guaranteeing their benefits and salaries.
The Hanwha Group should deal with potential monopoly issues if the merger is to turn out well. Hanwha Chemical takes up over 70 percent of the domestic EVA market after acquiring Samsung Total, which constitutes monopoly according to the Fair Trade Act. Hanwha is going to cope with it by emphasizing on the fact that most of the eco-friendly adhesive material it produced in Korea is exported.
Through the M&A, Hanwha Chemical’s ranking in the global petrochemical industry goes up from 59th to 13th. Also, its ethylene production volume is expected to increase from 1.91 million tons to 2.91 million tons.