Daewoo Acquisition Continues Fueling Speculation
Aug 18, 2006
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Videocon still appears to be the front-runner in the bid to purchase South Korea's Daewoo Electronics, according to unnamed sources quoted in the Korean media.
A great deal of speculation and conflicting reports have surfaced since Daewoo creditors – the state-run Korea Asset Management Corp. (KAMCO) - announced their intention to put the company on the bidding block back in July, 2005.
The troubled home appliance and consumer electronics maker has been in a debt workout program since parent Daewoo Group collapsed under debts of nearly U.S. $80 billion in 1999. KAMCO is a state asset management company and a major shareholder in Daewoo Electronics, once one of Korea's top home appliance makers. Woori Bank, South Korea's second-largest lender, is handling the sale procedure. They have stated their intention to make the sale by September 2006.
In March 2006, Videocon was said to have a deal all but signed to buy Daewoo for about U.S. $113 million. Later reports had as many as 19 companies placing bids for the company and estimates of the selling price approached $1 billion.
Among those mentioned as bidders were Videocon (Mumbai, India), which made two other major acquisitions in the last 2 years; Whirlpool Corporation (Benton Harbor, Michigan, U.S.), which acquired U.S. rival Maytag this year; and Turkish appliance maker Vestel Elektronik Sanayi Ve Ticaret A.S. None of the bidders were ever officially confirmed by KAMCO.
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