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Ford won't make final bid for Daewoo Motor |
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September 16, 2000
SEOUL, SEPT 15 (AP) - Ford Motor Co. announced on Friday that it will not make a final bid for the South Korea's debt-laden Daewoo Motor Co., casting doubt on the country's efforts to restructure its debt-ridden industries. "Ford Motor Company has decided not to make a final offer for the acquisition of Daewoo Motor," Ford Vice Chairman W. Wayne Booker said in a five-paragraph statement. "We believe that a proposal was not possible that would be in the best interest of Daewoo and Ford." The U.S. auto giant had beaten out joint bids by General Motors and Fiat, and DaimlerChrysler and Hyundai Motor for the right to conduct exclusive negotiations with Daewoo about taking over the assets of the country's second largest automaker. South Korean officials said Ford had offered dlrs 6.9 billion to take over Daewoo Motor, but the U.S. automaker had never publicly discussed its offer. When news that the Ford-Daewoo deal had fallen through reached South Korea's financial markets, the Korea Composite Stock Price Index fell 4.2 percent. Comments were not immediately available from Ford or Daewoo about what caused the proposed deal to fall through, but local newspapers had reported that Ford believed that Daewoo's debt could be higher than the dlrs 18 billion it reported and wanted to lower its bid. Ford had seen an acquisition of Daewoo as a chance to expand its foothold in Asia's fast-growing market. In June, credit banks of Daewoo Motor selected Ford as the sole negotiating partner to take over the troubled South Korean carmaker. Ford's dlrs 6.9 billion offer was better than those of General Motors Corp., which had formed an alliance with Fiat SpA of Italy, and another alliance between DaimlerChrysler AG and Hyundai Motor Co. of South Korea. Talks between Ford and Daewoo's creditors dragged on, however, as both sides tired to determine the exact amount of the carmaker's debt. President Kim Dae-jung had hoped that Ford's takeover of Daewoo would boost foreign investor confidence in the South Korean economy, which is undergoing restructuring following its recovery from the 1997-1998 Asian financial crisis. Daewoo Motor's troubles had been a huge burden on South Korea's stretched financial institutions.
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