Tata Motors All Set To Buy Out Daewoo Commercial For $118 M

Mumbai, Nov 5: | Updated: Nov 6 2003, 05:30am hrs
Tata Motors is close to acquiring Daewoo Commercial Vehicle Company (DCVC) for an estimated consideration of around $118 million. While Tata Motors has said that it would not comment on the acquisition price at this juncture, reports in the Korean press have said that this was the estimated acquisition price.

The process has definitely gained momentum with two of the top company officials, Praveen Kadle (director-finance) as well as Ravi Kant (director -commercial vehicle business unit) currently in Korea for negotiations.

Tata Motors Ltd on Wednesday signed a binding memorandum of understanding (MoU) with DCVC, Korea for the acquisition of the company. The transaction is expected to close in the next two to three months, subject to a final due diligence of DCVCs operations, the negotiations of further agreements and the receipt of applicable regulatory approvals in India and Korea.

Tata Motors had previously been selected as the preferred bidder for acquiring DCVC. The company is the second largest manufacturer of heavy commercial vehicles in Korea with a market share of 26 per cent. DCVC manufactures heavy duty trucks over eight tonne. The company has over 93 models in cargo, dump, mixer and tractor category.

It has an annual production capacity of 20,000 units on a two-shift basis.

The company, recently, introduced the 2003 Model Year Daewoo new generation of heavy-duty trucks, according to information available on the company website.

Tata Motors is, currently, working on a new generation of commercial vehicles. As part of its international strategy, the company has recently forayed into Senegal and also provided technical assistance in setting up Senbus, a bus manufacturing unit to the Senegalese government.

The company is also in the process of introducing its complete range of commercial vehicles in South Africa. The companys bid for DCVC was prepared by DSP Merrill Lynch, while a final contract would be signed between Tata Motors and Daewoo by the end of this calendar year. The Tata Motors stock opened on Rs 380.10 on the BSE on Wednesday, reached an intra-day high of Rs 394.80 and closed on Rs 383.70.