The FTC prohibited the merged company from refusing to supply ship engine parts, raising prices and delaying component supplies while ordering to guarantee the supplies of minimum volume for three years as conditions of the merger.“The approval kept the purpose of the merged company to strengthen competitiveness in the global engine market through investments in eco-friendly engines while preparing the minimum safety net for rival engine manufacturers,” the FTC said.“We made sure that the national key industries – shipbuilding and related intermediate goods sectors – can maintain fair competition.”HANWHA ENGINEThe antitrust body reviewed the potential restriction in competition in the vertical merger of engine parts and ship engines, the horizontal merger of ship engines, and the vertical merger of ship engines and vessels.
South Korea’s antitrust body gave its nod with conditions for the leading domestic shipyard HD Korea Shipbuilding & Offshore Engineering Co.'s (HD KSOE) acquisition of STX Heavy Industries Co., allowing them to cement their dominance in the local ship engine market.
The deal is expected to allow HD KSOE, the intermediate shipbuilding holding firm of the country’s shipbuilding and machinery conglomerate HD Hyundai Co., to control 70% of the local vessel engine market and 80% of the domestic engine component sector since its subsidiary HD Hyundai Heavy Industries Co.manufactures such parts.
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