South Korea positive on Videocon bid to buy out Daewoo Electronics
The South Korean government is favourably inclined to the Videocon-Ripplewood combine’s proposal to take over Daewoo Electronics, despite concerns over flight of technology from South Korea.
South Korea’s minister for commerce, industry and energy Sye-Kyun Chung told ET on Thursday that the Korean government does not interfere in business decisions. But he pointed to Tata Motors’ takeover of Daewoo Motors’ truck division and the benefits it brought to the Korean economy.
“Since Tata Motors acquired the Daewoo division, profits of the company have risen, employment has grown and the same management is in place. It is pretty nice. The same criteria could be used to evaluate the Videocon-Ripplewood bid,” he added. Mr Chung said that only some sections of the Korean society had expressed concerns over the Videocon bid. “The bids were based on an international tender. Negotiations are going on and a deal could be finalised some time early next year,” he added. The Videocon-Ripplewood combine had put in the largest bid for Daewoo Electronics.
Mr Chung is on a two-day visit to Mumbai to attend the India-Korea business summit organised, among others, by the Korea Trade Investment Promotion Agency and The Economic Times.
The minister met RBI governor YV Reddy on Wednesday and commerce and industry minister Kamal Nath on Thursday.
Mr Chung also supported a proposal by India to form an Asian oil buyers’ club to lobby with the Organisation of Petroleum Exporting Countries for a better deal. “It is a good idea. The major oil-consuming countries should help each other,” he added. South Korea will import almost $80 billion worth of oil this year, making it vulnerable to volatile price swings.
Mr Chung expressed satisfaction at the way talks between the countries on a Free Trade Agreement and Comprehensive Economic Partnership Agreement were progressing. He hoped that the FTA would be agreed upon some time next year.
Trade between India and South Korea is about $6.7 billion and South Korea is also the ninth-largest foreign investor in India. Mr Chung said his country favours a constant increase in trade and business relations between the two countries.
India, he said, has skilled manpower, cheap labour and a crying need for large infrastructure projects. South Korea has the technology, capital and knowhow to develop large projects.
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