Independent journal on economy and transport policy
07:55 GMT+2
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The European Commission has rejected the merger between the South Korean shipbuilding groups HHIH and DSME
No motivated by the dominant position that the concentration would have created in the market for the construction of LNG vessels
January 13, 2022
"LNG ships - commented Margrethe Vestager, European Commissioner for Competition - they are an element essential natural gas supply chain liquefied and allow the transport of this energy source in all over the world. Liquefied natural gas contributes to the diversification of European energy sources and therefore improves energy security. The merger between HHIH and DSME would determined a dominant position in the world market for construction of large LNG ships, for which there is a fort application from European carriers. Since they have not been presented remedies - specified Vestager referring to the failure presentation by the two South Korean companies of solutions for mitigate the impact of the merger – the merger would have as an effect the reduction in the number of suppliers and prices more high for large ships carrying liquefied natural gas. That's why we've banned fusion."
The European Commission has recalled that in the last five years the value of the world market for the construction of large ships LNG carriers has risen to 40 billion euros and that almost 50% of orders for the construction of this type of ship was issued by European shipowners. Brussels specified that together HHIH and DSME would have held a stake of at least 60% of the LNG shipbuilding market, a market in which there is only one other primary competitor.
The EU Commission explained that one of the reasons that have led to reject the merger is the high libello of the barriers to entry in this market, given the extreme complexity of the construction of liquefied natural gas vessels which are units highly sophisticated, a market that in recent years has recorded the exit of some operators and no new entry, which is not expected not even in the future.
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"LNG ships - commented Margrethe Vestager, European Commissioner for Competition - they are an element essential natural gas supply chain liquefied and allow the transport of this energy source in all over the world. Liquefied natural gas contributes to the diversification of European energy sources and therefore improves energy security. The merger between HHIH and DSME would determined a dominant position in the world market for construction of large LNG ships, for which there is a fort application from European carriers. Since they have not been presented remedies - specified Vestager referring to the failure presentation by the two South Korean companies of solutions for mitigate the impact of the merger – the merger would have as an effect the reduction in the number of suppliers and prices more high for large ships carrying liquefied natural gas. That's why we've banned fusion."
- Via Raffaele Paolucci 17r/19r - 16129 Genoa - ITALY
