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Business deals

Hyundai Heavy to buy Daewoo Shipbuilding in industry shake-up

Move comes as South Korean shipbuilders struggle with heavy debts and losses

Daewoo Shipbuilding is one of South Korea's Big Three shipbuilders, but has struggled in recent years. (EPA/Yonhap/Jiji)

SEOUL -- Hyundai Heavy Industries Group has inked a deal to consolidate two of South Korea's biggest shipbuilders as the industry struggles amid heavy debts and growing losses.

HHIG announced on Thursday that it has reached a deal to acquire a controlling stake in rival Daewoo Shipbuilding & Marine Engineering. Under the deal, HHIG will set up a joint shipbuilding venture with state-run Korean Development Bank, Daewoo's largest shareholder. The bank has agreed to transfer its entire 55.7% stake in Daewoo to the joint venture in exchange for 7% stake in the new company, with preferred shares worth 1.25 trillion won ($1.12 billion).

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