Hyundai Heavy Industries sets March goal for Daewoo Shipbuilding deal
Under the conditional deal announced Thursday, Hyundai Heavy, the world's largest shipbuilder, agreed to acquire a controlling stake in its third-ranked peer from state lender Korea Development Bank. Hyundai Heavy "intends to reach a final agreement with KDB as soon as early March," said a company insider.
The transaction is predicated on KDB confirming that Samsung Heavy, the world's second-largest shipbuilder, has no interest in purchasing Daewoo Shipbuilding shares. But because Samsung Heavy has been steadily losing money due to its struggling offshore plant business, it is unlikely to make a superior offer.
Hyundai Heavy's deal involves the group's holding company setting up a joint shipbuilding venture with KDB. The newly established unit would acquire all of KDB's 55.7% stake in Daewoo Shipbuilding.
The plan also entails infusing 1.5 trillion won ($1.34 billion) into Daewoo Shipbuilding through a private share placement, strengthening the joint venture's control. An additional 1 trillion won in financial support for the company is also under consideration.
The three shipbuilders affiliated with the Hyundai Heavy group would be placed under the umbrella of the joint venture along with Daewoo Shipbuilding. If the deal goes through, it would create an entity twice the size of Samsung Heavy. ■