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SAIC's Ssangyong bid looks successful
By Gong Zhengzheng (China Daily)
Updated: 2004-07-24 08:52
Shanghai Automotive Industry Corp (SAIC), China's biggest car producer, has
been chosen as the preferred bidder for Ssangyong Motor Co by the South Korean
automaker's creditors.
SAIC will sign a memorandum of understanding with the creditors, which are
led by Chohung Bank, on Tuesday in Seoul to buy a majority 48.9 per cent stake
in Ssangyong, China Daily was told on Friday.
"The final deal is expected to be clinched in September," the firm said in a
statement that was issued to the paper.
SAIC received the highest ratings in terms of price, acquisition conditions
and future business development plans for Ssangyong, Chohung Bank said.
But it did not disclose the price that SAIC had offered for South Korea's
fourth-largest automaker.
In December, creditors selected China National Blue Star Corp - a chemical
conglomerate - as the preferred bidder.
But the two sides failed to clinch an agreement in March because of disputes
on a sales price and questions over whether Blue Star could gain a blessing from
the Chinese authorities for its merger plan.
SAIC then claimed it was the only Chinese firm that had government backing to
bid for Ssangyong.
Ssangyong was put on sale after it was spun off from Daewoo Group, which was
dissolved due to heavy debts in 1999. Creditors took over through
debt-for-equity swaps.
"If our deal comes into fruition, we will maintain Ssangyong's existing
facilities, management and work force, and will further invest in the company in
the future," SAIC said in a statement.
SAIC and Ssangyong's businesses are highly complementary and the Chinese firm
will introduce the products of the South Korean vehicle producer into China, the
SAIC statement revealed.
SAIC, a newcomer to the list of the world's top 500 multinationals, is the
joint venture partner of Germany's Volkswagen and US General Motors (GM), which
are the two biggest foreign car makers in China.
During the first half of the year, SAIC's sales grew by 24 per cent
year-on-year to 439,600 units, including passenger models from Volkswagen and
GM, and home-grown mini vehicles.
Ssangyong has an annual production capacity of 180,000 luxury sedans and
sport utility vehicles, including Rexton, Rodius and Chairman.
It controls 10 per cent of South Korea's automobile market.
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