BRUSSELS (Thomson Financial) - The European Commission said it has cleared
South Korea-based STX Shipbuilding Co. Ltd.'s proposed acquisition of Norwegian
peer Aker Yards ASA.
Following an in-depth inquiry launched in December last year, the commission
said that "effective competition" on the shipbuilding markets would not be
significantly impeded as a result of the transaction.
The commission had concerns that the merger might, in particular, remove STX
as a potential new market entrant into a concentrated cruise ship manufacturing
market.
However, the EU executive said that by itself STX is "still far from close
to becoming an effective competitive constraint" on the existing cruise ship
construction market.
The in-depth investigation also showed that STX is not the only possible
market entrant and that, post-merger, a number of other Far-East shipbuilders
would be "equally well placed" as STX to enter the market.
The commission also examined a concern brought forward by a third party
related to subsidies, that South Korea might have granted or might grant in the
future to the merged entity and that might enable the latter to undercut prices
and monopolise the cruise ship market.
The commission found that, regardless of whether any of the financial
instruments granted to STX in the past were subsidies, the current financial
position of STX would not give the merged entity a dominant position.
In addition, it found no evidence indicating that STX was likely to receive
subsidies in the future which could significantly strengthen its financial
position and enable it to impede competition in the markets concerned.
In particular, the commission found that even if the type of future
hypothetical subsidies identified by the third party (subsidised loans and
guarantees) were granted, the advantage would not be such as to enable the
merged entity to acquire a dominant position on the cruise ship market.
The in-depth investigation also confirmed that there are no competition
concerns arising from minor overlaps of the merging companies' activities in the
area of certain types of cargo ships or from the vertical integration of STX
into engine production or shipping services.
simon.zekaria@thomsonreuters.com
sz/ejb
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