Hyundai Heavy Industries is holding a shareholders' meeting to decide on the acquisition of a rival Korean shipbuilder, raising concerns of a possible clash with its labor union that opposes the plan.

The labor union is staging a sit-in at a community center in Ulsan, South Gyeongsang Province, where the shareholders' meeting was scheduled to take place.

About 500 people, including Hyundai Heavy's shareholders and officials, attempted to enter the venue at around 7:45 a.m., but were blocked by some two-thousand union members who obstructed the entrance of the community center with close to a thousand motorcycles. 

In March, Hyundai Heavy signed a two-trillion-won deal to acquire Daewoo Shipbuilding and Marine Engineering with the shipbuilder's largest shareholder, the Korea Development Bank.

Under the agreement, Hyundai Heavy is to be split into two entities, a move strongly opposed by the union which says the restructuring would lead to massive debt and job cuts.

After relocating to nearby University of Ulsan, the company announced the meeting got underway late Friday morning.