The Korea Fair Trade Commission (KFTC) has begun a preliminary review of the proposed merger between Lotte Chemical Corporation and HD Hyundai Chemical Co., Ltd., following the companies’ submission on 26 November 2025. This marks the first major transaction progressing under the government’s ongoing restructuring program for the petrochemical sector.
The preliminary review mechanism allows parties to seek an early competition assessment before reaching the stage of mandatory notification, offering greater certainty for complex mergers and acquisitions governed by the Monopoly Regulation and Fair Trade Act.
The transaction involves significant operations within the Daesan petrochemical complex in South Chungcheong Province, where both companies currently operate production facilities anchored by Naphtha Cracking Centers. Lotte Chemical plans to physically divide its Daesan plant into a newly formed subsidiary, which will then be merged into HD Hyundai Chemical. HD Hyundai Chemical will remain the surviving entity, while the new subsidiary will be dissolved in the process. After the merger, Lotte Chemical intends to acquire additional shares so that the merged company will be jointly owned on a 50–50 basis by Lotte Chemical and HD Hyundai Oilbank Co., Ltd.
According to 2024 consolidated financial statements, Lotte Chemical reported total assets of KRW 20.4690 trillion (approximately EUR 14.1 billion), revenue of KRW 13.6401 trillion (approximately EUR 9.4 billion), and an operating loss of KRW 462.2 billion (approximately EUR 317 million). HD Hyundai Chemical reported total assets of KRW 5.9465 trillion (approximately EUR 4.1 billion), revenue of KRW 7.3229 trillion (approximately EUR 5.0 billion), and an operating loss of KRW 150.2 billion (approximately EUR 103 million).
The review takes place against the backdrop of the government’s December 2024 initiative to strengthen competitiveness in the petrochemical industry. Since then, the KFTC has gathered feedback from industry stakeholders through inter-ministerial consultations and on-site meetings conducted in September 2025. Because restructuring discussions typically require companies to exchange sensitive information—raising potential antitrust concerns—the KFTC has provided detailed guidance on the permissible scope of information sharing. The authority has also encouraged market participants to make use of the pre-notification consultation process to reduce uncertainty and shorten formal review timelines.
The KFTC has additionally coordinated closely with the Ministry of Trade, Industry and Energy on the development of a special act for the petrochemical sector that will introduce specific provisions for merger review and rules on collusive conduct. Legislative procedures remain on track.
On 26 November, the companies simultaneously submitted their application for preliminary review to the KFTC and their restructuring plan to the ministry. Since the merger agreement and formal notification are scheduled for next year, the KFTC had advised the parties to seek early assessment to allow for an expedited review. The authority has indicated that it will prioritize resources for merger cases connected to the broader restructuring of the petrochemical industry, but has also stressed the importance of complete and timely submissions from the companies involved.
Given the size of the businesses and their importance within Korea’s petrochemical value chain, the KFTC has stated that it will undertake a thorough analysis of the transaction’s potential competitive effects across upstream and downstream markets. Special attention will be paid to possible impacts on small and medium-sized enterprises and consumers, as well as the economic efficiencies that may result from the restructuring. The authority intends to ensure that the review meets the standards required under the Monopoly Regulation and Fair Trade Act.