By Jun Ji-hye
Iranian electronics manufacturer Entekhab plans to acquire Dongbu Daewoo Electronics by purchasing a 100 percent stake in the smaller Korean consumer electronics firm, local financial sources said Sunday.
The contract is expected to be worth around 200 billion won ($187 million).
The envisioned sale of the cash-strapped company follows a decision by major financial investors that had funded Dongbu Group's purchase of Daewoo Electronics in 2013. Dongbu was renamed DB Group.
It is the Iranian company's second attempt to take over the Korean company after its first trying to acquire Daewoo Electronics, the predecessor of Dongbu Daewoo Electronics, foundered in 2010.
Financial investors, who have been leading the sale of Dongbu Daewoo, are expected to announce their decision to select the consortium, comprised of Entekhab and the Korean private equity fund Whale Investment, as a preferred bidder soon, the sources said.
"Negotiations are underway, and Entekhab has actively participated in the bidding," one source said, asking not to be named. "There is a great possibility for the company to be selected as the preferred bidder considering various conditions."
The Iranian firm reportedly accepted the 100 percent employment succession of employees working in Dongbu Daewoo's factory in Gwangju, which has been cited as one of the key variables in the bidding.
China's Meidi Electronics and Turkey's Vestel are also vying for the company.
Entekhab has maintained a close partnership with Dongbu Daewoo, which gave it a competitive edge in the bid.
Dongbu Daewoo Electronics is an export-oriented home appliance provider specializing in small- and mid-sized products such as microwaves and washing machines. The firm gets around 80 percent of its total revenue from overseas markets especially in South America.
From Entekhab's point of view, the acquisition of Dongbu Daewoo could considerably raise its competitive power in overseas markets.
But some important challenges remain, such as the United States' move to resume economic sanctions against Iran.
Observers say the deal might not go smoothly amid the uneasy relationship between Washington and Tehran.
"It is hard to predict what variables will play a part in the end," another source said, asking for anonymity.
Eyes are also on whether DB Group, which owns 54.2 percent stake in Dongbu Daewoo, will make a final decision to sell its affiliate as the sale would be at a loss. When DB Group acquired Daewoo Electronics in 2013, the deal was worth around 275 billion won.
Iranian electronics manufacturer Entekhab plans to acquire Dongbu Daewoo Electronics by purchasing a 100 percent stake in the smaller Korean consumer electronics firm, local financial sources said Sunday.
The contract is expected to be worth around 200 billion won ($187 million).
The envisioned sale of the cash-strapped company follows a decision by major financial investors that had funded Dongbu Group's purchase of Daewoo Electronics in 2013. Dongbu was renamed DB Group.
It is the Iranian company's second attempt to take over the Korean company after its first trying to acquire Daewoo Electronics, the predecessor of Dongbu Daewoo Electronics, foundered in 2010.
Financial investors, who have been leading the sale of Dongbu Daewoo, are expected to announce their decision to select the consortium, comprised of Entekhab and the Korean private equity fund Whale Investment, as a preferred bidder soon, the sources said.
"Negotiations are underway, and Entekhab has actively participated in the bidding," one source said, asking not to be named. "There is a great possibility for the company to be selected as the preferred bidder considering various conditions."
The Iranian firm reportedly accepted the 100 percent employment succession of employees working in Dongbu Daewoo's factory in Gwangju, which has been cited as one of the key variables in the bidding.
China's Meidi Electronics and Turkey's Vestel are also vying for the company.
Entekhab has maintained a close partnership with Dongbu Daewoo, which gave it a competitive edge in the bid.
Dongbu Daewoo Electronics is an export-oriented home appliance provider specializing in small- and mid-sized products such as microwaves and washing machines. The firm gets around 80 percent of its total revenue from overseas markets especially in South America.
From Entekhab's point of view, the acquisition of Dongbu Daewoo could considerably raise its competitive power in overseas markets.
But some important challenges remain, such as the United States' move to resume economic sanctions against Iran.
Observers say the deal might not go smoothly amid the uneasy relationship between Washington and Tehran.
"It is hard to predict what variables will play a part in the end," another source said, asking for anonymity.
Eyes are also on whether DB Group, which owns 54.2 percent stake in Dongbu Daewoo, will make a final decision to sell its affiliate as the sale would be at a loss. When DB Group acquired Daewoo Electronics in 2013, the deal was worth around 275 billion won.
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