Doosan wins right to buy 36 percent of Korea heavy for 306 billion won

Bloomberg

Sangim Han

December 12, 2000

Seoul, Dec. 12 (Bloomberg) à‚– Doosan Corp., the trading arm of Doosan Group, will buy a 36 percent stake in Korea Heavy Industries & Construction Co., enabling the private company to control Korea’s sole maker of power generation equipment, the South Korean government said.

Doosan bid to pay 305.7 billion won ($258 million) or 8,150 won per share, for the Korea Heavy stake to state-run Korea Development Bank, the Commerce, Industry and Energy Ministry said in a statement.

“The buyer will become the owner of the power generation equipment monopoly as part of the government’s privatization drive,” Janet Lee, the ministry’s spokeswoman said.

The government had pledged to complete the privatization of the state-run company by the end of this year.

Doosan’s offer price is 114 percent more than its market price, which closed today at 3,800 won each. It beat rival bidding group, led by Speco Co., a maker of asphalt-mixing plants.

The auction has revived investors’ concern about whether the bidders have sufficient knowledge of the industry to run the company. The government blocked units of Korea’s top four industrial groups, including Hyundai Heavy Industries Co., from bidding on worries they would get too much control over power used by industries.

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