Just a day after bidding with another automaker for South Korea’s Daewoo Motor Co., the chairman of DaimlerChrysler said in a Tuesday newspaper interview that the U.S.-German automaker was interested only in “attractive” parts of Korea’s second biggest automobile company.
“Daewoo is a very difficult case,” Juergen Schrempp told the Frankfurter Allgemeine Zeitung. “A takeover of Daewoo is out of the question for us.”
Go deeper with GlobalData
Daewoo, buried under $18 billion of debt, is being auctioned off by its creditor banks. DaimlerChrysler and South Korea’s Hyundai Motor submitted a joint bid Monday, as did General Motors Corp. in tandem with Italy’s Fiat SpA [NYSE:FIA]. Ford Motor Co. made a solo bid.
“We’ll participate in the bidding procedure only to identify possibly attractive individual parts of the company,” Schrempp said.
Bidding allows DaimlerChrysler to look behind the curtains at Daewoo, with special access to its financial books and strategic planning. The Stuttgart-based automaker said bidding was one way to find out which parts of the company could be cleaved off and salvaged.
On Monday, DaimlerChrysler acquired a 10 percent stake in Hyundai, South Korea’s leading carmaker, for $428 million. The deal was aimed at advancing Hyundai’s plan to become one of the world’s top five automakers by 2010.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataKorean government officials have said they would only approve a Hyundai bid if the Korean carmaker joined with a foreign company to avoid a potential monopoly.
Daewoo’s creditors plan to select two finalists by Friday and one successful bidder by the end of September. The successful bidding price is expected to reach $3 billion.
Daewoo has the capacity to make 2 million vehicles a year in plants stretching from the Philippines to Poland. But Daewoo borrowed heavily to expand, and cash flow from operations eventually fell short. Then the Asian currency crisis hit South Korea in late 1997.
Last year, Daewoo Motor lost $3.9 billion on revenues of $5 billion. Creditors demanded a major overhaul, and a restructuring committee began seeking a buyer.
