Videocon to bid for Daewoo Electronics

By agencies   |   Friday, 24 February 2006, 08:00 Hrs
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MUMBAI: India's biggest color TV maker Videocon Industries Ltd. will bid to acquire South Korean consumer electronics maker Daewoo Electronics, the Indian company's Chairman said today.

Media reports have said the deal could cost Videocon Industries $1 billion, but Chairman Venugopal Dhoot declined to specify its bid price. "The merchant bankers of Daewoo's creditors have approached us and we have decided to throw our hat in the ring," Dhoot said.

Unlisted Daewoo Electronics is 97 percent owned by creditors, including Korea's state-run Korea Asset Management Corp. and Woori Bank, a unit of Woori Financial Group and has a deal with Mumbai based Anchor group that markets Daewoo range of color TVs, refrigerators and ACs.

Videocon is a strong player in the same field that Daewoo operates. Dhoot said its interest in acquiring Daewoo Electronics was because of synergies in the two home-appliances makers.

Daewoo Electronics was placed under creditor-led debt rescheduling along with other Daewoo companies after the parent group went bankrupt in 1999 under $80 billion of debt. Daewoo electronics is strong in Korea, some European countries and in the U.S.- the market that Videocon is aggressively targeting.

"Daewoo's merchant bankers have approached us saying they could get Daewoo for us and we think it is a strategic business for us," he said.

Dhoot said many international consumer goods giants, including China's leading white goods maker Haier, were in the race for Daewoo Electronics.

"It becomes a very strategic thing for me and it will be possible for me to pay some extra in this," he said.

"We have good internal cash flow of about $22.5 million, funding this acquisition is not a problem for us," he said.

Videocon has been very aggressive of late. Last year it acquired French electronics giant Thomson’s color picture tube division and later took over Swedish company Electrolux’s Indian operations.

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