Volkswagen AG of Germany,
Europe’s largest automaker, is the favourite among four candidates to buy a majority
stake in LDV Ltd of the UK, a source close to the British manufacturer told
just-auto.com today.
"VW is the leading
candidate," the source said. "Its operations would fit well with LDV’s,
but there have been discussions with three other potential partners. A deal
may not be days away, but it could be weeks away."
The Independent, a daily
newspaper in London, reported on October 2 that VW was close to buying a controlling
stake in LDV.
The UK manufacturer is owned
50% by Daewoo Motor Polska Sp z oo (DMP), part of Daewoo Motor Co Ltd, the bankrupt
Korean producer. LDV is held 25% by its employees and managers. The remaining
25% is owned by institutions 3i, Mercury Asset Management and Royal Bank of
Scotland.
"VW likely would buy
DMP’s shares, but it may take equity beyond that – perhaps all of it,"
the source said. "The institutions may be looking to sell their stakes
too."
If control of Daewoo changes,
the board of LDV already has the right to buy back DMP’s stake. But LDV is not
waiting for Daewoo’s future to be decided, as it plans in early 2001 to rollout
a new model range developed with DMP, the source said.
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 GlobalData"DMP has been willing
to sell its stake in LDV," the source said. "It may need the cash,
and it sees advantages in LDV being a strong partner."
The new models vary in gross
weight from 2.0 tonnes to 3.5 tonnes: lighter versions are named BD100, heavier
versions are named LD100. Both will be offered as drop-sides, minibuses, panel
vans and pickups.
LDV and DMP will share 80%
of the parts in making the new vehicles, but each company has capacity to produce
all versions completely, so the British manufacturer would face no logistical
complications under new owners, the source said.
US automaker General Motors
Corp, widely seen as the only candidate to buy Daewoo, may view DMP and LDV
as the most interesting operations of Daewoo in Europe, observers have said.
But GM has not been among the parties holding serious talks with the British
company, and LDV sees no reason to wait for the US automaker to determine its
interest in Daewoo, the source said.
"LDV cannot wait for
that to happen," he said. "The launch of the new products is getting
too close, and LDV will want to be sure it can deliver these vehicles to markets
smoothly. LDV has been looking for months for a strategic partner that can provide
access to a worldwide distribution network for its products."
Read a related story about
Daewoo and LDV here.