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SK bid for Inchon Oil Refinery approved

Eric Watkins
Senior Correspondent

LOS ANGELES, Dec 7 -- South Korea's antitrust regulator has unconditionally approved SK Corp.'s bid to acquire bankrupt refiner Inchon Oil Refinery Co.

"We have concluded that [SK] will not be able to control market prices even after the acquisition," said a spokesman for the Fair Trade Commission (FTC).

The FTC had taken a cautious attitude toward SK's application since it would raise the firm's market share to 40%, and the combined share of the nation's top three refiners—SK, GS Caltex, and S-Oil Corp.—to around 86%.

The approval came nearly 3 months after SK submitted an application to the FTC in September for the acquisition of Inchon Oil for a total of 1.6 trillion won ($1.5 billion).

In October, SK reduced its bid for Inchon Oil by 160 billion won to about 3.04 trillion won, industry sources said (OGJ Online, Oct. 28, 2005).

The acquisition will boost SK Corp.'s refining capacity to 1.11 million b/d from the current 840,000 b/d.

Inchon Oil went bankrupt in 2001 and was placed in court receivership in 2003. In September 2004, Sinochem's bid of 635.1 billion won was accepted but quickly opposed by Citigroup Inc., Inchon's largest creditor, which said the price was too low.

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