STX cleared over Aker Yards shareholding

The European Commission has approved South Korea's STX Corp.'s 39.2 percent acquisition of Norwegian shipbuilder Aker Yards that dates back to October last year.

The decision gives the Korean shipyard full voting rights for its shares in Aker Yards, which is active in the building of cruise ships and ferries, and also makes merchant and offshore vessels. STX has never built cruise ships or ferries, and has instead focused on building various types of cargo vessels, such as containerships or gas tankers.

The EC investigation launched in December looked at whether the proposed merger might, in particular, remove STX as a potential new market entrant into the concentrated cruise ship manufacturing market, in which Aker is one of the three main global players, together with Italy's Fincantieri and Meyer Werft of Germany.

The commission found that by itself STX was 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 was not the only possible market entrant and that post-merger a number of other Far East shipbuilders would be as equally well placed as STX to enter the market, the EC said.

The investigation 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 monopolize 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, the commission 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.

Source: American Shipper