DSME Workers Agree to Go on Strike over Proposed Hyundai Takeover
- Business & Finance
The majority of workers employed by South Korea’s Daewoo Shipbuilding & Marine Engineering (DSME) on Tuesday agreed to go on strike in a bid to oppose a takeover by Hyundai Heavy Industries (HHI).
Reports of potential strikes emerged earlier this month after Hyundai’s plans to acquire DSME were revealed in January 2019.
The decision to go on strike was supported by a majority of DSME workers in a meeting on February 19, South Korea’s Yonhap informed citing the workers’ 5,600-member union.
The union said the precise date for the strike would be determined at a later point in time.
The merger of the South Korean shipbuilding majors, revealed by DSME’s largest stakeholder, the state-backed Korea Development Bank (KDB), has raised fears of potential job cuts.
KDB holds a 55.7 percent stake in DSME, with an estimated worth of KRW 2.16 trillion (USD 1.94 billion). Reports say a formal takeover agreement is to be signed in March this year with KDB transferring its DSME stocks to HHI and buying KRW 1.5 trillion worth of HHI stocks that would be issued later. It was further said that the bank would consider providing KRW 1 trillion in financial help to DSME.
Should the merger go through, however, it would create a shipbuilding giant with a combined backlog order of close to 17 million compensated gross tons.
As World Maritime News reported earlier, the takeover talks come after DSME in 2018 met 90% of its orderbook target for the first time in the last four years. The orderbook included LNG carriers, crude oil carriers, containerships, and special-purpose vessels.
Hyundai said it intends to sell part of its stake in refiner Hyundai Oilbank to Saudi Aramco for KRW 1.8 trillion as part of its restructuring.
World Maritime News Staff