The proposed merger between the two Korean shipping giants would be stopped citing it as anti-competitive and the decision is likely to be announced this week, said the report, citing three people familiar with the matter. The European Commission declined to comment.

 

The merger has been approved by regulators in Singapore, China and Kazakhstan, but it needs the green light from the EU, Japan and South Korea for the deal to be completed.

 

The veto will be the first by the EU’s competition authorities since Brussels prevented a tie-up between India’s Tata Steel and Germany’s Thyssenkrupp more than two years ago over concerns it would drive up prices for consumers.

 

The latest decision comes as energy prices have soared in Europe this winter, with freight costs for liquefied natural gas in Asia rising to record levels of more than $300,000 per day on surging global demand. This merger move is likely to impact the EU as it is the world’s third-largest importer of LNG.

 

The two South Korean companies dominate the market for making ships that carry super-chilled LNG.

 

One EU official stated that blocking the merger would help protect European consumers from paying higher prices for LNG, which emits less carbon dioxide than coal but is still a source of greenhouse gas emissions, said the FT report.

 

Ships carrying LNG to Asia have been rerouted to Europe, where consumers are willing to pay a premium for the fuel to generate electricity.

 

The proposed tie-up was first announced by Hyundai Heavy in 2019. Brussels had demanded that the companies provide remedies to limit concerns about preserving competition, the report stated.

 

To address competition concerns, Hyundai Heavy had proposed not raising LNG vessel prices for the time being and transferring some technology to smaller domestic shipyards, according to industry officials.

 

But the offer fell short, said the officials, adding that Hyundai Heavy had not made a formal proposal to address the EU’s request for other remedies.