Hanwha Close to Daewoo Deal
By Kim Hyun-cheol
Staff Reporter
Hanwha Group said Sunday that it expected a smooth take over of Daewoo Shipbuilding & Marine Engineering (DSME).
``The price was over two trillion won ($1.5 billion) cheaper than expected,'' Keum Choon-soo, a top Hanwha executive, was quoted by Yonhap News as saying.
The remark corresponds with the gap between the market-predicted takeover price of up to eight trillion won and the company's six trillion won book value.
The final price will be confirmed after due diligence and follow-up negotiations with the Korea Development Bank (KDB), DSME's main creditor.
``Judging from our initial inspection, DSME is viable, at least on paper,'' Keum said. ``I believe the final price will be fixed at a reasonable level.''
Skepticism prevailed in the wake of the bid victory regarding Hanhwa's financing ability.
``We can finance the purchase since we acquired Daehan Life Insurance,'' the executive said.
Hanwha made it clear it will guarantee job security at DSME, denying reports of a post-buy rationalization involving job cuts. On Thursday, the DSME union demanded Hanwha refrain from any payroll reduction.
As for the new CEO of the shipbuilder, the business group said it is consulting experts, adding it was open to selection from within or outside.
The energy and chemical business group was picked last month as the preferred bidder in the competition for DSME in a race with Hyundai Heavy Industries for a controlling stake.
Hanwha shares, however, struggled on the stock market despite the surprise win in this year's biggest merger and acquisition (M&A) deal.