The Korean Fair Trade Commission said on Monday that it had conditionally approved LX International Corp.'s bid to acquire Hankuk Glass Industries (HanGlas).
Given that LX will see its market share in the architectural coated glass market shoot up to more than 50% once the deal goes through, the competition regulator inserted a provision to keep it from raising prices arbitrarily over the next three years.
In late March this year, LX International signed an agreement to acquire a 100% stake in HanGlas. The main purpose of the acquisition was to grow the size of the coated glass and window business of its affiliate LX Hausys. The glass market is largely divided into transparent glass, coated glass and windows.
HanGlas and LX Hausys, which are currently the second- and third-largest suppliers in the coated glass market respectively, are expected to outrank KCC Glass, the current No. 1 company, through the merger.
However, in the transparent glass and window market, KCC Glass still maintains its top position.
The main reason for the Fair Trade Commission's conditional approval was due to the concern over possible price increases. For this purpose, it decided to limit the rate of increase in sale prices for coated glass for three years.
"With this conditional approval, the possibility of harming competition that may occur in the coated glass market has been fundamentally blocked while conditions have been in place for the two merging companies to compete on an equal footing with KCC Glass," said an official of the Fair Trade Commission.
Write to So-Hyeon Kim at
alpha@hankyung.com
