Doosan Heavy completes Daewoo Heavy takeover

Doosan Heavy Industries & Construction Co. Ltd. yesterday completed its takeover of Daewoo Heavy Industries and Machinery Ltd., one of 12 affiliates of Daewoo Group that collapsed after the Asian financial crisis in 1997.
During an investors’ conference held in Seoul yesterday, Doosan said it finalized the merger by purchasing 1.7 trillion won ($1.7 billion) of Daewoo Heavy shares owned by two state-run companies, the Korea Development Bank and the Korea Asset Management Corp., also known as Kamco.
The two companies bought 20 percent and 31 percent of Daewoo Heavy shares, respectively, in an effort to reorganize the company after Daewoo Group folded in 1999 under debts that totaled $80 billion.
In 2000, the Korea Development Bank split Daewoo Heavy Industries, one of the major divisions of Daewoo Group, into Daewoo Heavy Industries & Machinery and Daewoo Shipbuilding Marine Engineering Co., now the world’s second-largest shipbuilder.
Korea Development Bank and Kamco chose a Doosan-led consortium as the prime bidder in October and signed an official contract in January.
Daewoo Heavy was renamed Doosan Infracore Co. yesterday and had 13 new members appointed to its board.
Daewoo Heavy, the first major Daewoo affiliate to merge with another company, is the nation’s biggest maker of construction equipment, including machine tools, industrial vehicles and defense products. Its annual revenues last year reached 2.8 trillion won, with a net income of 123 billion won.
Creditors of other Daewoo affiliates, including Korea’s second-largest lender, Woori Bank, said they plan to sell other Daewoo companies, such as Daewoo International Corp. and Daewoo Precision Industries Co., the same way Daewoo Heavy was sold.

by Jung Ha-won