As the Korea government is pushing for restructuring of the faltering shipbuilding industry, speculation grows over a possible merger between the country’s two major shipbuilders — Samsung Heavy Industries and Daewoo Shipbuilding and Marine Engineering, reports Korea Herald.
South Korea's shipbuilding sector has been facing rough weather. The global economic slowdown is severely impacting the country's so-called big three in the industry: Hyundai Heavy Industries, followed by second-ranked Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries. In addition, all are facing huge financial crisis.
With the Daewoo merger, Samsung can advance into the world’s largest shipbuilder, pushing Hyundai Heavy Industries down to the second spot.
Recently, South Korea’s former strategy and finance minister Yoon Jeung-Hyun has suggested that the South Korean Big Three shipbuilders should consider merging.
He said that the number of South Korea's shipbuilding giants, such as Hyundai Heavy Industries (HHI), Samsung Heavy Industries (SHI), and Daewoo Shipbuilding & Marine Engineering (DSME), needs to be cut down to one or two.
The news report with the title of “Seoul in push to merge SHI and DSME” came after a presentation by former Strategy and Finance Minister Yoon Jeung-hyun on the need for integration among major Korean shipbuilders to stay afloat of the industry.
Yoon claimed that the number of major shipbuilders needs to be scaled down to one or two companies, pointing out the worsening overcapacity issue in the industry. He did not mention specific corporate names for a merger deal, but there is no doubt that SHI and DSME could be a target of the deal.
Regardless of the recent news report and Yoon’s remark, the Korean government has long been looking for a Korean candidate to take over the 31.5 percent stake that state-run Korea Development Bank has in the faltering DSME.