ANKARA

The EU blocked a $2 billion Hyundai-Daewoo shipbuilding merger on Thursday, the European Commission said on Thursday.

"The merger between the two South Korean shipbuilders would have created a dominant position by the new merged company and reduced competition in the worldwide market for the construction of large liquefied natural gas (LNG) carriers," an EU Commission statement said.


European Commission Executive Vice-President Margrethe Vestager, who is in charge of competition policy, stressed that large LNG vessels are essential in the supply chain of LNG and enable its transport around the globe.

"LNG contributes to the diversification of Europe's source of energy and therefore improves energy security," she said, arguing that the merger would have led to a dominant position in the global market for the construction of large LNG vessels, for which there is significant demand from European carriers.

"Given that no remedies were submitted, the merger would have led to fewer suppliers and higher prices for large vessels transporting LNG. This is why we prohibited the merger," she explained.

Initially announced in 2019, the acquisition of Daewoo Shipbuilding & Marine Engineering Co Ltd by Hyundai Heavy Industries Holdings would have created the world's biggest shipbuilder with a market share of more than 60%.

The global market for the construction of large LNG carriers represented up to €40 billion ($45.9 billion) over the past five years, with European customers accounting for almost 50% of all orders, according to the statement.