DaimlerChrysler, Fiat too line up to take over Daewoo

DaimlerChrysler, Fiat too line up to take over Daewoo
REUTERS

FRANKFURT, DECEMBER 13: The European car manufacturers DaimlerChrysler and Fiat SPA have expressed an interest in ailing South Korean auto maker Daewoo Motor, the German newspaper Handelsblatt reported on Monday.

It said DaimlerChrysler, which already has a 3 per cent stake in Daewoo commercial vehicle unit Ssangyong Motor, had asked Daewoo Motor's main creditor, the Korea Development Bank, for detailed information about the group.

DaimlerChrysler declined to comment on the report, which a spokesman called speculative. Fiat also declined comment. On Monday, the Korea Development Bank said an international auction of Daewoo Motor could be held if talks with General Motors, scheduled to take place on Tuesday or Wednesday, were unsuccessful.

"What's at stake is how much money General Motors is ready to pay and whether the US firm is interested in part of Daewoo Motor's plants at home and abroad or all of them," a KDB official said from Seoul.

Handelsblatt said that in addition to GM, "Ford Motor,DaimlerChrysler and Fiat... have signalled interest in a possible takeover of Daewoo Motor Co."It said DaimlerChrysler had requested a meeting with representatives of Daewoo's creditors and talks were taking place, although it remained to be seen whether the German group was really interested in a takeover, the paper said, citing a spokesman for the Korea Development Bank.

Daewoo Motor, part of the disintegrating Daewoo Group, has liabilities totalling 18.6 trillion won ($16.4 billion) against 12.9 trillion won of assets. A sell-off plan would require the approval of its foreign creditors, owed an estimated $1.8 billion. Analysts said some creditors would favour a deal with GM because it had a previous partnership with Daewoo that lasted 15 years until October 1992.

In August, after nearly two years of talks, GM and Daewoo Motor signed a memorandum of understanding on a strategic alliance but failed to reach a final agreement.

"The Europeans are obviously intrigued by Korea but whether they're braveenough to do it is another issue," said Salomon Smith Barney analyst John Lawson.

He said it was not surprising that DaimlerChrysler and Fiat might be asking for information. "You have to look at what's on offer and what opportunities it might bring," he said. "You'd expect Volkswagen to run a rule over them as well."

Daewoo Matiz to cost more
NEW DELHI:Daewoo Motor India Ltd (DMIL) will hike prices of its small car Matiz by about Rs 20,000 in early January. The manufacturing cost of Matiz has gone up by about Rs 30,000 per car due to increase in material cost and improving quality and safety of the vehicle, but the company has decided to pass on only about Rs 20,000 to the customers, DMIL Dy MD B S Min said. However, he declined to say what the exact prices of the different versions would be after the hike.