(Adds European Commission declines comment, adds Hyundai comment, Daewoo not immediately available, details)

BRUSSELS, Dec 10 (Reuters) - South Korean shipbuilder Hyundai Heavy Industries' proposed acquisition of rival Daewoo Shipbuilding & Marine Engineering Co Ltd is set for an EU antitrust veto after the companies declined to offer remedies to allay competition concerns, people familiar with the matter said.

Hyundai, one of the largest shipbuilders in the world and which had announced the deal in 2019 in part due to overcapacity in the sector, said on Friday it expected unconditional European Commission clearance for the deal.

That is unlikely after an informal offer of remedies, which included the sale of part of a shipyard, fell short while a formal proposal was never put on the table, the people said.

The Commission is concerned that the deal would create two large players from the current three.

Hyundai said it expected the EU competition watchdog to reach the same conclusions as regulators in Singapore, China and Kazakhstan which have already given the green light.

"Market dominance cannot be evaluated by market share alone in the shipbuilding industry," Hyundai said in a statement.

"It is important to also assess the market based on overall market conditions and dynamics. The shipbuilding market is unable to be structurally dominated by one individual company."

The Commission, which has set a Jan. 20 deadline for its decision, declined to comment. Daewoo did not respond to a request for comment sent outside of office hours.

EU concerns centered on liquefied natural gas (LNG) carriers which are used to transport LNG between Europe and the Middle East and North Africa, other people familiar with the matter told Reuters last year.

European shipping companies are major customers of Hyundai and Daewoo.

An EU veto would be the first since the Commission in 2019 blocked Thyssenkrupp and Tata Steel's plan to form a landmark joint venture, on worries that the deal would have pushed up prices and reduced competition. (Reporting by Foo Yun Chee in Brussels Editing by Louise Heavens and Matthew Lewis)