Hyundai Heavy Industries (HHI) shareholders decided to vote in favour of the merger with Daewoo Shipbuilding & Marine Engineering (DSME), despite strong workforce opposition this week. The merger will create a Korean megayard, which will be responsible for 21.2% of the global orderbook.
According to Yonhap, unionized workers of Hyundai Heavy Industries Co. continued their strike on Tuesday, May 28, against the HHI’s proposal on cancelling its merger plan with Daewoo Shipbuilding & Marine Engineering Co. (DSME).
Worker unions at South Korean shipbuilding giant Hyundai Heavy Industries Co. staged a partial strike on Thursday to protest against the merger with the compatriot major Daewoo Shipbuilding and Marine Engineering Co Ltd (DSME).
As the Korea Times reports, Hyundai Heavy Industries is facing protests from Ulsan City over its goal to establish the headquarters of Korea Shipbuilding & Offshore Engineering, the newly merged company of Hyundai Heavy Industries and Daewoo Shipbuilding & Marine Engineering (DSME), in Seoul.
South Korean major shipbuilder Hyundai Heavy Industries announced that its newly spun-off company Hyundai Global Services, specializing in providing total marine services, has signed a MoU with compatriot shipping company KSS Line, for entering into eco-friendly ship business.
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.
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.
