South Korea’s industry ministry on Friday said it will keep close tabs on potential impacts of the mega acquisition deal by Hyundai Heavy Industries Co. (HHI), as local marine equipment firms expressed concerns over losing orders.
Earlier this month, Hyundai Heavy signed a formal deal with the state-run Korea Development Bank (KDB) to buy its smaller local rival Daewoo Shipbuilding & Marine Engineering Co.
The Ministry of Trade, Industry, and Energy said while HHI’s purchase of Daewoo Shipbuilding will help beef up the competitiveness of the local shipbuilding industry through the sharing of technology and business know-how, it also acknowledged that subcontractors can be concerned about potential fallout.
“In terms of local equipment firms’ concern over securing orders, Hyundai Heavy Industries and the Korea Development Bank already promised to grant Daewoo with an independent management and to maintain the existing subcontractors,” Vice Minister Cheong Seung-il said during a meeting with officials from marine equipment firms.
Cheong added the government will continue to monitor the follow-up steps of the merger, seeking to minimize any problems that may arise.
The ministry said it will also listen to voices from local marine equipment firms, and roll out various financial and employment programs to revitalize the country’s shipbuilding industry.