Hyundai Heavy Industries has shifted the takeover of DSME to the first quarter of next year as it is still awaiting approval from antitrust regulators at home and overseas.
In July, HHI applied for regulatory approval from South Korea, Japan, China, Kazakhstan, Singapore and the European Union for deal to go ahead.
So far, Kazakhstan is the only country that has approved.
Many believe the merger could collapse if any one country were to oppose it. Several shipbuilding observers believe Japan may do just that because of the ongoing trade row between the two countries.
“In terms of anti-trust approval, decisions have yet to be made in the key areas — Europe, Japan, China and Singapore, so uncertainty will persist for some time.
'Tough year' expected in 2020
“The new company will totally dominate LNG building and it is assumed that pricing power will be improved in this and other key sectors as a result,” Maritime Strategies International director Stuart Nicoll says.
“However, this will come against a background of further decline in the global orderbook, which suggests 2020 will be a tough year to maintain price appreciation even if consolidation is achieved.”
“Once the merger issue is resolved, and assuming it goes ahead, the seemingly-dormant World Trade Organization case over subsidies to [South] Korean yards may come to life.
“With all this going on, it is unsurprising that the industry is feeling beleaguered.
"However, as we expect newbuilding demand to be lower in the next five years than the last, it is clear that measures taken now to adjust to the new demand landscape will bear dividends.”
“After all, the next decade is going to see a revolution in ship technology — whether it comes sooner or later — and that, along with renewal demand from the boom of the 2000s, means there are opportunities ahead for those companies that can weather the current storm.”
