South Korean shipbuilding major Hyundai Heavy Industries (HHI) is set to sign an official contract with Korea Development Bank (KDB) today for the takeover ofDaewoo Shipbuilding & Marine Engineering (DSME), Business Korea has reported.
In January, HHI signed a conditional agreement with KDB to acquire the controlling stake in DSME.
HHI will create a holding company to control its shipbuilding business after the takeover. HHI will be the largest shareholder of the holding company, controlling a 26% stake while KDB will be granted a 18% stake in the company, becoming the second largest shareholder.
Following the takeover, the major shareholders of DSME including HHI, KDB, National Pension Service (NPS) and KCC will jointly replenish KRW1.5 trillion ($1.3bn) of capital into the company.
HHI’s takeover of DSME has been facing strong oppositions from unions of both yards as they worry that the merger would lead to massive layoffs. Both unions have passed plans to go on a strike to protest against the merger.