GM Daewoo to buy 40 pct of Poland FSO for $255 mn

[nadepalma]

http://economictimes.indiatimes.com/...ow/2352558.cms

GM Daewoo to buy 40 pct of Poland FSO for $255 mn
9 Sep, 2007, 1559 hrs IST, REUTERS

SEOUL: GM Daewoo Automotive & Technology Co, South Korea's third largest auto maker, said on Sunday it will buy a 40 per cent stake in carmaker FSO from the Polish government for 238.7 billion won ($254.5 million).

With the stake purchase, the Polish auto maker will become a joint venture, tentatively named GM FSO. The deal is part of GM Daewoo's efforts to expand in Europe, but the South Korea-based company is unlikely to buy the remainder 60 per cent in FSO, a GM Daewoo spokesman said.

General Motors Corp and partners took a majority stake in some of the assets of failed Daewoo Motor in 2002, creating GM Daewoo.

But FSO and other car assembly lines in East Europe were left out of the deal. Separately, the Korea Economic Daily said on Saturday in an unsourced report that GM Daewoo was expected to buy a former Daewoo Motor plant in Uzbekistan soon.

The company spokesman said no decision has been made yet on the plant purchase. In April, GM Daewoo President Michael A. Grimaldi told Reuters that the company was in talks with Romania to buy Daewoo Motor's plant there.

[Kennyboy]

I wonder why they down right just purchase the assembly plant and build cheap-o Chevies over there? Building cars in highly developed countries such as Germany has to be expensive and intensive.

[Bravada]

FWIK, the report is imprecise. Polish newspapers reported a NEW entity is being formed (GM-FSO or something of that kind), where GM has 40% and FSO (controlled by the Ukrainian ZAZ) has 60%. It will be responsible for handling the assembly of Aveos at Warsaw's FSO, but it will not take over FSO's holdings.

I will keep you informed if I find something clarifying the matter.

[redTT]

Now Daewoo can claim to be European!!!

[paul8488]

Hmmm... interesting how it's reported as GMDAT making the purchase, and not GM. I don't know anything about business, so I don't really grasp the significance of it being GMDAT and not GM.

[CmicasatheGreat]

Originally Posted by paul8488

Hmmm... interesting how it's reported as GMDAT making the purchase, and not GM. I don't know anything about business, so I don't really grasp the significance of it being GMDAT and not GM.

GM-DAT is a subsid. of GM... same as Holden, Opel , and for the most part Saturn. They are incorporate under their own articles with all of their shares owned by GM(exception is Daewoo as GM owns the majority with Suzuki, Banks, and SAIC owning part). It would be a if U started a corporation under S-Corp and then spun off a new company completely owned by U... the corporation but call it a different name with 100% of shares belong to U... That new corporation in theory would be able to sell shares but only if allowed by the Board of the larger company.

[Bravada]

Again, local (and not Indian) media state GM is the partner, not GM DAT.

[chrisbenz]

This is a good move on GM Dawoo's part. By not buying it outright, they do not have to put up all that money.

[Bravada]

OK, I've found a report confirming it's GM DAT:

http://auto.gazeta.pl/auto/1,48316,4470542.html

Still, it doesn't appear that GM DAT is going to BUY any FSO shares. There will be a new entity formed, with 40% held by GM DAT and the rest by FSO.

[geozinger]

However they structure this deal, this is good news for GM. They now have a lot of manufacturing capacity in cheap former Soviet-bloc nations. Maybe they can get us some more Opels over in the US that way...

[raygamhu]

Originally Posted by geozinger

However they structure this deal, this is good news for GM. They now have a lot of manufacturing capacity in cheap former Soviet-bloc nations. Maybe they can get us some more Opels over in the US that way...

Due to the fact that GM DAT(GM) will produce the facelifted Aveo in FSO next year, the move it is logic. GM DAT wants to avoid the fact, that a Chevrolet to be produced by a third party, were they have no influence.
Rumors are also that the new Corsa which will be based on the Gamma platform will come from FSO in 2012-2013, together with the complete new AVEO in 2010.

[GM lover]

The purchase of this plant should really help GM of Europe expand.

[Bravada]

Aveo production at FSO starts in autumn (trial runs are already underway since August). I've hard nuffink and nuffink about Corsa coming from FSO (it is still a separate entity from GM, controlled by the still-volatile Ukrainian UkrAvto), but Poland hosts GM's best plant for build and long-term quality in Gliwice, which makes Astra C sedans, Zafiras and Astra B Classics, and used to be the home to Opel Agila A and Suzuki Wagon R+.



Building cars in New Europe is not that cheap anymore (though still cheaper than in Western European countries), what is important is that Chevrolet has some production capacity in the EU now and evades the 10% import duties - not to mention they can adjust production to demand more easily now.

[2012Aveo]

This is an interesting post. I plan to buy an Aveo in 2012. I believe GM Daewoo will play an increasing role in GM's ventures in emerging as well as developed markets (Asia and Eastern Europe). This is the GM of the 21st century.

[1931Chevy]

I still think they could had bought this for less money, heck Ford bought a 74% stake on the Romania plant for 76 million and the plant has the capaity for 300,000 cars and engines