Samsung Heavy Industries Co. is not interested in taking part in the race of purchasing Daewoo Shipbuilding & Marine Engineering Co., as its parent Samsung Group doesn’t wish to expand its shipbuilding business, according to Yonhap. Yet, on January 2019 Hyundai Heavy Industries expressed its interest on buying, the second-placed, Daewoo Shipbuilding and Marine Engineering Co Ltd.
The state-owned Korea Development Bank (KDB) signed an MoU with Hyundai Heavy Industries Co, the world’s largest shipbuilder by sales, to sell its part of Daewoo shipbuilding. KDB owns the 55.7% in Daewoo.
Yonhap reported that KDB was to contact with Samsung Heavy to discuss if there’s an interest in the Daewoo Shipbuilding takeover.
According to a Samsung Heavy official
As far as I know, the management is reviewing the proposal. But it is too early to say (whether to bid or not).
Moreover, Samsung Heavy is expected to issue its take over proposal by the end of February. In the meantime, the Bank has planned to make the deal official in early March, right after it reviews Samsung Heavy’s proposal.
In the possibility that the take over goes ahead, costing 2 trillion won, the South Korean shipbuilding industry would be controlled by two crucial shipbuilders, Hyundai Heavy and Samsung Heavy.
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Although, South Korean shipbuilders experienced losses in the past years, in 2018, for the first time after seven years, South Korea surpassed China and took the lead on shipbuilding orders.
The South Korean government hopes that the local shipbuilding industry can be maintained by the two major players in order to better-compete China. Thus, on November 2018 South Korea announced another package of financial measures to boost small and mid-sized shipbuilders, who are encountering dwindling new orders over the last years.
