Ford, the world’s second largest carmaker, has been named the exclusive bidder for Daewoo Motor after offering an estimated $6.8bn for the insolvent South Korean automotive group.
The Daewoo restructuring committee – conducting an international auction on behalf of creditors – has abandoned plans to select two preferred bidders in favour of a sole approach from Ford. The decision is a major setback for General Motors, Ford’s arch-rival. GM had hoped to make Daewoo an export hub for south-east Asia and its manufacturing partner in South Korea.
Daewoo’s creditors rejected GM’s bid and a rival offer from DaimlerChrysler, the German-US group, after receiving assurances from Ford over future employee numbers, vehicle platforms and union agreements. The US carmaker will now have 60 days to finalise takeover terms for Daewoo, one of the last available volume brands in Asia. Daewoo has manufacturing capacity for 2m cars a year. The company was put up for sale last year after its liabilities were assessed at $16bn.
The Daewoo restructuring committee had originally invited offers from five carmakers – Ford, GM, DaimlerChrysler, Fiat and Hyundai Motor. But GM and Fiat submitted a joint offer – building on their recently-announced alliance – while DaimlerChrysler made a joint approach with Hyundai after agreeing to acquire 10 percent of South Korea’s largest carmaker.
Ford was seen as a less controversial choice than either GM or DaimlerChrysler, according to officials in Seoul. GM, which was in exclusive talks with Daewoo creditors until last autumn, aroused bitterness in South Korea for failing to save Daewoo from bankruptcy last year. It also faced renewed criticism over the break-up of a previous joint venture with Daewoo in 1992.
DaimlerChrysler was said to have eliminated itself by submitting an artificially low bid.
JA1rgen Schrempp, DaimlerChrysler chairman, indicated that a partnership with Hyundai was preferable to Daewoo. On Wednesday, however, a dispute between Hyundai’s controlling family shareholders threatened to overshadow the DaimlerChrysler tie-up.
That cleared the way for Ford as the preferred bidder for Daewoo. Reuters