Finnish technology provider Valmet said it will supply scrubbers for seven new building container vessels, to be built by DSME for South Korean shipping company Hyundai Merchant Marine. The container ships will be the largest in the world, with over 23,000 TEUs each.
Hyundai Heavy Industries is expected to sign an official agreement with Korea Development Bank on March 8 to take over Daewoo Shipbuilding & Marine Engineering. However, even if the deal closes, HHI will still have to solve several issues in order to fully acquire DSME. One of the issues the HHI faces is that is the evaluation of the merger proposal by major countries, such as the US, the EU, China and Japan.
The merger between Hyundai Heavy Industries and Daewoo Shipbuilding and Marine Engineering is expected to boost the orderbook of LNG vessels, according to Vessels Value. The merger will double the orderbook of HHI from USD 6 billion to more than USD 12 million. In the possibility that the merger is official and finalized, the results will have reverberations in the newbuild market.
Hyundai Heavy Industries’ plan to acquire Daewoo Shipbuilding & Marine Engineering is experiencing difficulties, as union members of the two shipbuilders decided to start a strike to oppose to the possible takeover. The reason why the unions oppose, is that the acquisition is possible to lead to layoffs across overlapping jobs in the design, sales and research departments.
The majority of employees working at South Korea’s DSME decided to go on strike in a bid to oppose a takeover by Hyundai Heavy Industries , on February 19. The decision to go on strike was supported by a majority of DSME workers South Korea’s Yonhap informed.
The labour union at Hyundai Heavy Industries, demanded from the company to provide job guarantees to its employees if it wants to go ahead with the takeover of Daewoo Shipbuilding & Marine Engineering. Namely, during January, Korea Development Bank, DSME’s largest shareholder, signed an MoU with Hyundai Heavy Industries to sell its stake.
Hyundai Heavy Industries expressed its interest on buying, the second-placed, Daewoo Shipbuilding and Marine Engineering Co Ltd (DSME). If the purchase was to proceed, HHI would control more than 20% of the global market, according to Reuters. Also, Korea Development Bank, the biggest shareholder of DSME, reported that it has signed a conditional deal with Hyundai Heavy Industries Group to sell Daewoo shares.
The 2018 has been a better-than-expected year for South Korean shipbuilders, with an increase in new orders and especially in LNG ships. The combined new orders won by the shipyards in 2018 are almost up 20% compared with last year.
Daewoo Shipbuilding & Marine Engineering (DSME) was fined 10.8 billion won ($9.59 million) by the Fair Trade Commission for abusing its power against its contractors between 2013 and 2016. The FTC also stated it will file a charge against the shipbuilder with the prosecution, saying DSME’s practice was an abuse of its power as the ordering body.
South Korean shipbuilder Daewoo Shipbuilding and Marine Engineering (DSME) has signed a deal for the construction of an additional LNG carrier, reaching this year’s orders for the company to 18.
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