Hyundai Heavy Industries, Posco join race for Daewoo Shipbuilding

27 August 2008

Mumbai: Hyundai Heavy Industries Co Ltd, the world's top shipbuilder, and Posco, Asia's third-largest steelmaker, have expressed interest in acquiring a majority stake in Daewoo Shipbuilding & Marine Engineering Co, joining three other major bidding groups vying for the smaller shipyard.

State-owned Korea Development Bank (KDB) and a government agency have put up for sale their combined 50.4 per cent stake in the world's No 3 shipbuilder, in a deal estimated to be worth between $6.5 billion and $8 billion.

The bid has drawn much attention from both domestic and foreign investors, although foreign buyers are excluded from bidding due to Daewoo's defence involvement.

Other contenders include energy- and construction-focused GS Group and Hanwha Group, led by chemicals maker Hanwha Corporation.

Cash-rich Posco and Hyundai Heavy, however, are strong contenders and the government has said it would prefer cash purchases and have cautioned against deals with heavy debt.

KDB will screen parties submitting letters of intent in the next one or two days and weed out disqualified bidders.