Ford's withdrawal opens new battle
Ford's withdrawal opens new battle
SEOUL (AFP): General Motors Corp. and DaimlerChrysler are back in the battle to become Asia's number one car maker following Ford Motor Co's withdrawal from a deal to buy ailing Daewoo Motor.
Both will be looking to see what the South Korean firm's creditor banks decide Monday after Ford dropped its US$6.9- billion bid to buy Daewoo Motor Co. following three months pouring over the troubled company's finances.
Ford had been named the winning bidder for Daewoo in June, beating DaimlerChrysler, South Korea's top auto maker Hyundai Motor Co. and a joint bid by General Motors (GM) and Fiat of Italy.
Ford's withdrawal put the auction in disarray. However, South Korean officials promised to find new bidders.
Foreign auto companies have been seeking to gain a toehold in South Korea, the second largest car market in Asia after Japan.
In September, France's Renault jumped into the South Korean market by acquiring Samsung Motors Inc. DaimlerChrysler had also secured a nine-percent stake in Hyundai.
GM was quick to say it would like to resume talks with Daewoo. The GM-Fiat consortium is now considered the front-runner.
DaimlerChrysler, however, looked less interested in making a new bid. "We are not interested in taking over Daewoo," DaimlerChrysler spokesman Michael Pfister said last week.
But its partner, Hyundai Motor, said it was ready to make the second bid, although its chances of success are slim.
Anti-trust watchdogs had opposed Daewoo's sale to Hyundai, which acquired Kia Motors Corp. last year, gaining control of a 70 percent share in the domestic market.
Thus Daewoo's fate depends on whether GM resurrects its bid. The US company had made a $5-billion bid for Daewoo but South Korean officials believed its final offer would be lower.
Some analysts did not rule out the possibility of Ford coming back to the auction, saying the US company might have pulled out as a ploy to lower the price.
"Ford had wanted to bring down the price. Ford is still interested and this may just be a strategic tactic to get the government back to the negotiating table," Samsung Securities' Mark Barclay said.