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Electrolux among 3 bidders for South Korea's Daewoo Elec: source
August 21, 2012 / 9:33 AM / 5 years ago

Electrolux among 3 bidders for South Korea's Daewoo Elec: source

SEOUL (Reuters) - Electrolux AB (ELUXb.ST) is among three bidders who made a binding bid to acquire unlisted South Korean home appliance maker Daewoo Electronics, a source with direct knowledge of the matter said on Tuesday.

South Korea’s construction-to-fiber SM Group was also one of the bidders, the source said, while Dongbu CNI (012030.KS) said in a regulatory filing its parent Dongbu Group had submitted a joint bid with a financial investor.

This is the sixth time Daewoo’s creditors, including Woori Bank and state-run Korea Asset Management Corp (KAMCO), have put up the washing machine and refrigerator manufacturer up for sale.

The source did not give financial details of Electrolux’s and SM Group’s bids. Local media previously estimated the sale value will be around 300 billion won ($264 million).

Electrolux had previously tried and failed to acquire Daewoo.

Creditors plan to choose a preferred bidder as early as this week and sign a stock purchase agreement by October, the source said.

Daewoo Electronics entered a workout process in 1999 after South Korea’s now-defunct Daewoo Group toppled during the Asian financial crisis in the late 1990s, and has remained in creditors’ hands after five failed attempts to offload it since 2006.

According to Daewoo, the company reported yearly net losses since 2008 due to restructuring costs such as liquidating unprofitable overseas units, despite maintaining yearly operating profits of between 5 billion won and 40.1 billion won.

But, lately, analysts said Daewoo Electronics has been building up market share in Latin America and Africa despite a dearth of investment in research and development.

“In terms of business synergy, Electrolux would be well-positioned to acquire Daewoo,” said Soh Hyun-cheol, head of corporate analysis at Shinhan Investment Corp.

“Electrolux has little market share in emerging markets where Daewoo has a good track record. However, Daewoo’s creditors are expected to primarily pay attention to pricing.” ($1 = 1135.5750 Korean won) (Editing by Muralikumar Anantharaman)

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