South Korea connects biggest shipbuilders for swap deal worth 2 trillion to take over second-positioned Daewoo and make a worldwide heavyweight controlling more than 20 percent of the market.
The move comes as the global shipbuilding segment recuperates from a worldwide monetary downturn that prompted monstrous misfortunes, far reaching work cuts and, in 2017, the $2.6 billion bailout of South Korea’s Daewoo Shipbuilding and Marine Engineering Co Ltd.
State- funded Korea Development Bank (KDB) claims 55.7 percent of Daewoo, and has said it plans to move the stake and unite the nation’s three greatest shipbuilders – which incorporates Samsung Heavy Industries Co Ltd – into two.
The combination of two of the giant shipbuilders would ease rivalry and capacity, which have cut ship prices, KDB Chairman Lee Dong-gull said at a news meeting. Lee said on Thursday, “The deal will raise the fundamental competitiveness of Daewoo, at a time when the threat from latecomers in China and Singapore is growing.”
Daewoo will likewise get liquidity support of 2.5 trillion won ($2.25 billion) from KDB and Hyundai, Hyundai said in a stock trade documenting. KDB likewise said it would approach Samsung Heavy to measure any enthusiasm for assuming control Daewoo. A Samsung Heavy representative said it has gotten a proposition from KDB and that it needs to audit the issue.
Analyst Um Kyung-a at Shinyoung Securities said in a statement that, “Consolidation is good for the industry, but not for the company which buys the stake.”