Electronics manufacturers from China, Turkey and Iran are competing to acquire South Korea’s Dongbu Daewoo Electronics, along with two other Korean companies, according to industry sources Wednesday.
China’s Meidi Electronics, Turkey’s Vestel and Iran’s Entekhab have submitted letters of intent to purchase a 100 percent stake in Dongbu Daewoo, as of late Tuesday, the deadline for the main bidding applications, according to the financial industry.
The two Korean companies are Dayou Winia, a provider of kimchi refrigerators, and SAE-A, domestically known as a golf clothing brand.
Dongbu Daewoo Electronics is an export-focused home appliance provider that specializes in small and mid-size products sold at affordable prices.
Global platform products by Dongbu Daewoo Electronics (Dongbu Daewoo Electronics)
The sale of cash-stripped Dongbu Daewoo Electronics follows a decision by financial investors that had funded Dongbu Group’s purchase of Daewoo Electronics in 2013.
The company is currently exporting home appliances including washing machines, refrigerators and ovens to a total of 80 countries in South America, Europe, Asia and North Africa, according to the firm.
China’s Meidi is likely to help Dongbu Daewoo establish a stronger presence in the Chinese market as it is one of the top five home appliance makers.
Iran’s Entekhab is a partner of Dongbu Daewoo, which is expected to serve as a competitive edge in the bid. The Iranian firm is rising as a strong contender, sources said.
Turkey’s Vestel is a leading electronics maker, including TV products, in the Middle East region.
“A preferred bidder is expected to be announced this week at the earliest,” said a financial source.
The three foreign players are viewed as having an advantage, considering their capital power compared to Korea-based Dayou Winia and SAE-A, according to an industry source.
The Dongbu Daewoo deal is expected to be worth around 200 billion won ($ 185.7 million).
Dayou was preparing to purchase the Dongbu unit by selling two of its affiliates, but the sales have fallen apart.
Dayou on Wednesday said the company would raise capital by issuing new stocks, including some additional 100 billion won for the normalization of operations of Dongbu Daewoo.
The proposal, however, was reportedly rejected by acquisition overseer NH Investment & Securities.
By Song Su-hyun (song@heraldcorp.com)
