Ford Motor Co has taken line honours in the battle for debt-laden Daewoo Motor with a W7.7 trillion ($6.9 billion) bid. Financial Supervisory Commission Chairman Lee Yong Keun named Ford the sole preferred bidder from a field of three. The decision came a day earlier than scheduled and this, coupled with the fact Lee declined to announce a second preferred bidder, suggests the US auto maker's offer was considerably higher than either of those tabled by the DaimlerChrysler/Hyundai Motors and General Motors/Fiat camps.
"People were talking about Daewoo fetching W5 trillion to W6 trillion. It was significantly better than that," says Richard Pyo, analyst at Credit Suisse First Boston.
For Ford, buying Daewoo will not be a problem. At end-March, the company's automotive division had cash on hand of $23 billion, giving a net cash position of $12 billion. Since then, it has agreed to buy Land Rover from BMW for E3 billion ($2.8 billion), two-thirds of which is payable upfront when the transaction completes on Friday 30 June and the remainder in 2005.
Expectations are the Daewoo deal will be completed by end-September.