Shown above is an oil tanker built by DSME. Courtesy of DSME

In late January, Hyundai Heavy Industries (HHI) signed a preliminary deal to acquire its rival Daewoo Shipbuilding & Maritime Engineering (DSME). The former signed the contract with the state-run Korea Development Bank, which has a 55.7 percent stake in the latter.

But experts point out the transaction, which involves the world’s two largest shipyards headquartered in Korea, is not a done deal because it has to get the go-ahead not only from Korean regulators but also those of China and Japan.

Typically, a merger and acquisition (M&A) contract is subject to approval by the anti-trust agency of a certain country. But in the case of mega-sized deals that greatly affect global consumers, other countries also have a say.

In the case of the shipbuilding industry, HHI will have to get the green light from China, Japan, the United States and the European Union, which purchase many ships from HHI and DSME.

The two companies’ combined market share would be slightly higher than 20 percent; and while this is not so large, in specific segments such as LNG and container carriers, and oil tankers the figures are much higher.

For instance, the two firms combine to account for more than 80 percent of the market in LNG carriers.

And there are recent examples of aborted takeovers attributable to the objections of other countries.

Midway through last year, Qualcomm scrapped its $44 billion bid to purchase NXP Semiconductor after the biggest deal in the chip industry failed to win China’s approval.

Out of nine relevant jurisdictions, eight approved the contract, but China’s veto practically ended the deal.

It also remains to be seen whether Korea’s Fair Trade Commission will easily give a nod to the acquisition.

In 2016, the antitrust agency refused to approve SK Telecom’s attempt to buy CJ HelloVision after a seven-month review. SK Telecom is Korea’s largest mobile operator while CJ HelloVision is the country’s top cable TV operator.