Creditors of South Korea’s Ssangyong Motor have definitely picked China National Blue Star Group as a preferred bidder to buy a controlling stake worth about $US620 million in the sport utility vehicle maker, Reuters reported.
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The Chinese chemicals conglomerate on Monday won out over General Motors and other interested global car makers, as it signed a memorandum of understanding with creditors of Ssangyong, giving it an exclusive right to buy a 55.4% stake in the firm.
“We aim to present takeover prices by the end of January,” Liu Xianqiu, vice president of the Chinese group told Reuters, though he did not give any financial details and declined to elaborate further on the group’s strategy.
The news agency noted the agreement ended confusion over the bidding process sparked last week after another Chinese firm, Shanghai Automotive Industry Corp – GM’s main partner in the booming China car market – said it had received Chinese government permission to take over Ssangyong.
Reuters said Blue Star’s acquisition in South Korea would be the latest in a string of foreign acquisitions by state-owned firms looking to spend some of China’s trade surplus to expand globally but the selection of the firm, which also runs a chain of noodle shops, has raised eyebrows among some analysts, particularly given the clutch of household names in the automotive field it was competing against.
But some experts told Reuters that China may not be after factories and assembly lines in its investment forays abroad as much as foreign know-how and style.
The report said Ssangyong, which has capacity to produce 180,000 vehicles a year with a workforce of 7,500, was put up for sale after creditors took control of the debt-ridden firm in late 1999 and Blue Star said it would invest more than $1 billion in plants and research and development.
Ssangyong builds Rexton, Korando and Musso SUVs and Chairman passenger cars and uses Mercedes-Benz technology for some mechanical parts, such as engines.
