July 15, 2026
The Korea Fair Trade Commission (KFTC, Chairperson Biung-Ghi Ju) determined that the business combination being pursued by Lotte Chemical Corporation, Lotte Daesan Petrochemical Corporation, HD Hyundai Oilbank Co., Ltd., and HD Hyundai Chemical Co., Ltd. — as part of the petrochemical business restructuring initiative ("Daesan No. 1") — raises concerns of substantially restricting competition in the domestic Low Density Polyethylene (LDPE) and Ethylene Vinyl Acetate (EVA) markets. After going through the remedy-proposal submission procedure, the examiner submitted the examination report to the Commission. Deliberation procedures for this business combination case have accordingly commenced, and the examination report was also sent to the respondents on July 15.
The examination report records the illegality found by the examiner during the investigation and the examiner's proposed remedial opinion; it does not bind the Commission's final decision. Please note that a final decision on the case will be made following independent deliberation by the Commission.
<Overview of the Business Combination>
HD Hyundai Chemical will absorb and merge with Lotte Daesan Petrochemical, and Lotte Chemical will additionally acquire shares in HD Hyundai Chemical, the surviving entity of the merger. As a result, Lotte Chemical and HD Hyundai Oilbank will each ultimately hold a 50% stake in HD Hyundai Chemical, becoming its largest shareholders. The business combination subject to this filing consists of ① the merger of HD Hyundai Chemical with Lotte Daesan Petrochemical, and ② Lotte Chemical's acquisition of shares in HD Hyundai Chemical to become its largest shareholder. As a result, Lotte Chemical and HD Hyundai Chemical will jointly operate both companies' naphtha cracking centers (NCC) and other petrochemical production facilities located in the Daesan Industrial Complex.
<Examination Process>
After receiving a voluntary pre-merger review request for this business combination on November 26, 2025, the examiner analyzed the complex and extensive relevant product market conditions (production, sale, import/export, etc. of 20 products) and broadly gathered input from stakeholders.
The examiner determined that the business combination posed significant concerns of restricting competition in the domestic LDPE and EVA markets due to a horizontal combination (a combination between competing businesses), and notified the respondents of these competition-restriction concerns.
Specifically, the examiner pointed to coordinated effects (competition being restricted because the reduction in competitors resulting from the combination makes it easier for businesses to coordinate on prices, quantities, transaction terms, etc.) and unilateral effects (competition being restricted where, even if the combined company unilaterally raises prices or engages in other competition-restricting conduct after the combination, competing businesses face difficulty supplying substitute products in a timely and sufficient manner).
In response, the respondents prepared a draft remedy plan aimed at resolving the competition-restriction concerns in the domestic LDPE and EVA markets, and subsequently submitted a revised plan reflecting input from stakeholders and experts as well as the examiner's requests for revision and supplementation of the remedy plan.
<Examiner's Proposed Action>
The examiner determined that this business combination substantially restricts competition in the domestic LDPE and EVA markets, in violation of Article 9 of the Monopoly Regulation and Fair Trade Act, and — taking into account the content of the remedy plan submitted by the respondents — proposed a corrective order opinion. The proposed corrective order consists essentially of various affirmative and negative obligations aimed at blocking the anti-competitive effects (coordinated effects and unilateral effects) of this business combination.
<Next Steps>
The KFTC plans to promptly convene deliberations to finalize its review of the business combination related to the Daesan No. 1 petrochemical business restructuring case. In addition, for subsequent stages of the petrochemical business restructuring, the Commission plans to closely examine the impact on market competition and continue to protect competition in the domestic petrochemical market.