Home
Global Supplier Directory
APPLIANCE Engineer
Supplier Solutions
APPLIANCE Line
Whitepaper Library
Calendar of Events
Association Locator
Contents Pages
Market Research
Subscription Center


 
Daily News

Report: Dongbu, Not Electrolux, to Acquire Appliance Maker Daewoo
Aug 27, 2012
 Printable format
 Email this Article
 Search

KAMCO is trying, yet again, to divest Daewoo Electronics, South Korea's third-largest appliance producer, and Reuters reports that South Korean conglomerate Dongbu has been named the preferred bidder.

Daewoo Electronics Corp. was once a part of Daewoo Group, which collapsed in a $80 billion bankruptcy in 1999. Daewoo Electronics has been owned by former creditors--primarily Korea Asset Management Corporation (KAMCO)--since then.

Daewoo shareholders have sold off parts of the company in pieces in the last decade, and have several times attempted to divest the entire business.

Daewoo's Long Search for a New Home

KAMCO tried to sell off Daewoo in 2005, with at least 19 countries around the world placing bids. Media reports said that appliance OEMs bidding for Daewoo in 2005 included U.S.-based Whirlpool Corp., India's Videocon, and Turkey's Vestel. By October 2006, Videocon Industries (Mumbai) officially announced the signing of a preliminary agreement to purchase Daewoo for $726 million. Videocon was partnering in the acquisition with RHJ International SA, a holding company of the U.S. equity fund Ripplewood Holdings LLC.

But Videocon and/or Ripplewood apparently had second thoughts about the price tag and asked for a discount. Discussions stalled, and KAMCO put the For Sale sign out again in November 2007.

A major new bidding war erupted in 2009. Sweden's Electrolux and Iran's Entekhab were selected as the top preferred bidders for Daewoo in March 2010.

In August 2010 Entekhab was named the winning bidder, reportedly agreeing to pay $518 million. If the deal closed - and worldwide sanctions against Iranian businesses could somehow be circumvented - Entekhab would be transformed from a regional Mid East appliance industry player to global appliance giant.

As ApplianceMagazine.com reported in November of 2010, Entekhab Industrial Group personnel reported that the acquisition of Daewoo Electronics was underway, and the group had begun the process of bringing Daewoo into the Entekhab corporate structure.

But, by early 2011, the deal was going sour. In February, Korea's Yonhap News indicated that Entekhab did not have the financing in place for the purchase and, with Iranian and international investors "showing little interest," had not succeeded in arranging financing by an early February 2011 deadline. The news agency said creditors extended the deadline for two months, until April 7.

By April Entekhab had not been able to come up with the funding, or even a satisfactory plan for how it intended to get the funding, prompting Daewoo shareholders to cancel the deal and restart talks with Electrolux.

Entekhab Group, in a statement reported by Reuters, threatened to pull its distribution business from appliance maker Daewoo and take legal action against Daewoo shareholders. Entekhab called the actions of Daewoo shareholders illegal but did not make clear its grounds for the claim.

Entekhab at the time distributed Daewoo appliances in Iran, accounting for about 5% of Daewoo business.

In statements reported by the Iranian Students News Agency, Entekhab held Daewoo shareholders responsible for coming up with a solution - one that will give Daewoo to Entekhab in the end. Entekhab and Daewoo shareholders eventually came to a settlement that allowed the Daewoo sale to other parties to continue.

However, by then Electrolux's latest bid had been rejected.

A new round of bidding started in mid-2012. Bidders included, once again, Electrolux, along with SM Group. Korea's MK Business News reported in early August that South Korea's Dongbu Group was also submitting a bid.

On August 23, 2012, Reuters reported that, according to a regulatory filing, Dongbu was named preferred bidder, at a price of about $326 million.

Back to Daily News

 

Daily News

...........................................................

Oct 23, 2014: Whirlpool Corporation to Showcase Resource-Efficient Technologies at Greenbuild

Oct 23, 2014: CWIEME Chicago exhibition had record attendees

Oct 22, 2014: Middleby to add U-Line to residential appliance business

Oct 22, 2014: iRobot's 3Q exceeds expectations, driven by Home Robots growth

Oct 22, 2014: Whirlpool Canada named 2014 Energy Star Manufacturer of the Year

More Daily News>>

RSS Feeds
.........................................................
Appliance Industry
Market Research

...........................................................

September 2014: Appliance Industry Focus: HVAC
June 2014: Appliance Magazine Market Insight: April 2014
May 2014: Appliance Magazine Market Insight: March 2014
April 2014: Appliance Magazine Market Insight: February 2014




 
Contact Us | About Us | Subscriptions | Advertising | Home
UBM Canon © 2014  

Please visit these other UBM Canon sites

UBM Canon Corporate | Design News | Test & Measurement World | Packaging Digest | EDN | Qmed | Plastics Today | Powder Bulk Solids | Canon Trade Shows