EU approves deal on Hyundai car carrier division

BRUSSELS, Belgium December 2, 2002; AP reported that The European Union Commission Friday approved the purchase of Hyundai Merchant Marine Co. Ltd.'s car carrier division by two Scandinavian shipping lines after the buyers agreed to withdraw from an existing agreement with another shipping company.

The Commission feared the $1.3 billion deal involving Sweden's Wallenius Lines AB and Norwegian Wilhelmsen ASA "might significantly reduce competition and lead to higher prices" for the shipping of cars on sea routes from northern Europe to the Middle East, and from the Mediterranean to the Middle East.

Wallenius and Wilhelmsen already operate a joint venture with Japan's Nippon Yusen K.K. over those routes.

To remedy the Commission's concerns, Wallenius and Wilhelmsen agreed to terminate the WALLNYK agreement with Nippon Yusen.

The canceling of the agreement "re-establishes the competitive situation prevailing prior to the proposed merger," the Commission said.

The new division will be renamed Ro-Ro Korea, with Wallenius and Wilhelmsen owning 80 percent and Hyundai the remaining 20 percent.

Ro-Ro Korea will enjoy exclusive contracts with Hyundai Motor Co. Ltd. and its subsidiary Kia Group to ship cars for an initial five-year period. The deal includes provisions for extensions.

The deal will help Wilhelmsen in its quest to become the world's largest auto carrier. Hyundai will use the money to pay debts.