The Korea Fair Trade Commission said on the 31st it approved the merger review of three Hanwha affiliates that recently acquired a combined 15.89% equity in Korea Aerospace Industries (KAI). Hanwha affiliates holding KAI equity are Hanwha Aerospace (9.9%), Hanwha Systems (4.98%) and Hanwha Aerospace USA (1.01%).
When one company acquires shares of another in a way that could raise concerns about restricting competition in the field, it must undergo a merger review by the Korea Fair Trade Commission (FTC). In such cases, even if shares are acquired, if a control relationship is not formed, it is presumed there is no restriction of competition.
That day, the Korea Fair Trade Commission (FTC) said in a notice to the press corps that "at this point, Hanwha's securing of 15.89% equity alone is not considered to be at a level of control that would allow it to exercise substantial influence over KAI's overall management."
As grounds for this assessment, the Korea Fair Trade Commission (FTC) noted that government-side equity is stronger than Hanwha's, with 35.16% of KAI equity held by The Export-Import Bank of Korea (26.41%) and the National Pension Service (8.75%).
However, the Korea Fair Trade Commission (FTC) said, "If Hanwha further acquires KAI equity and becomes the largest contributor, or concurrently serves in one-third or more of KAI executive positions, or concurrently serves as KAI CEO, another merger review will be conducted."
A Hanwha official said, "We will actively contribute to strengthening the global competitiveness of K-defense, advancing Korea's space and aviation industry, and revitalizing the regional economy," adding, "We will continue to seek consistent avenues for cooperation with KAI."