<h1>Renault-Nissan, Mahindra among seven bidders for Ssangyong Motor</h1> May 29, 2010
Seven companies have submitted LOIs to acquire Ssangyong Motor,
eDaily reported, citing several sources involved in the auction.
The potential bidders include Renault-Nissan, India’s Mahindra and Ruia Groups respectively, Seoul Invest, a Korea based PEF, and Yong An Hat Company the holding company of Daewoo Bus.
The report said the participation by Renault-Nissan, which was not known to be interested until now, would make the bidding very heated.
It added that Ssangyong Motor would announce the preferred bidder in August.
Also reporting on the story, the Reuters article ‘
Renault, Mahindra in race for South Korea Ssangyong Motor‘ speculated on the potential bidders
[blockquote]
“Mahindra has good reason to be interested in buying Ssangyong as this fairly young auto firm can learn auto manufacturing and marketing procedures from Ssangyong…It can also learn key technologies in carmaking,” said Kevin Lee, an analyst at Shinhan Investment Corporation in Seoul.
[/blockquote] The market seemed to agree as Mahindra shares rose 3.2 percent in Mumbai.
[blockquote] Mahindra has been looking for acquisitions to expand its portfolio and get access to new markets since it lost out to larger rival Tata Motors to buy Jaguar Land Rover in 2008, and analysts said the firm had more to gain from purchasing Ssangyong.
But South Korean media said the Renault-Nissan alliance might be a more willing buying, citing an official at Renault Samsung, South Korea’s third-largest automaker.
[/blockquote] [blockquote]
“There was opposition within the company, but we judged we could turn aggressive with enlarged production line-ups and participated in the bidding,” Yonhap news quoted an unnamed Renault-Nissan official as saying.
[/blockquote] [blockquote] South Korean media has put the value of the deal at $300 million-$500 million as a potential buyer is expected to subscribe to new shares amounting to Ssangyong’s current market value of $370 million to own at least 50 percent of the company and also pay a management premium.
[/blockquote] [blockquote] India’s Ruia Group, based in the eastern city of Kolkata has also submitted a letter of intent for Ssangyong.
“
We have been turning around sick companies in the past. Given our expertise in that, when this opportunity opened up in Korea, we decided to make a bid,” a spokesman for the group told Reuters.
[/blockquote]
For previous stories on the sale of Ssangyong Motors see here.
(Sources: eDaily, Reuters)