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I thought this article was interesting (Below) -- states that the bid to take over Ssangyong by Bluestar of China has ended. When Ssangyong put itself up on the market a month or two ago, GM Daewoo was one of the first bidders, along with Renault Samsung and a few other Chinese companies. GM hoped to get a hold of Ssanyong because they build an "executive" car called the Chairman (looks a lot like a Benz E-Class) and a number of SUVs -- these are two areas that GM Daewoo are very weak in their home market and in the Asian market in general. Eventually GM lost out on the bid and Ssangyong signed a Memorandum of Understanding (MoU) with Bluestar of China to be the preferred bidder. But to be honest, this made not sense at all since Bluestar is a chemical company, has no experience in the auto industry and wouldn't be able to offer Ssangyong anything other than capital to keep the company together. But it seems as though the Chinese government has intervened here as well and decided to block the acquisition due to a number of factors. The most important being that the Chinese Government has tried to consolidate its many many infant auto companies into larger companies since there is over crowding in the auto market -- Beijing would much rather have 6 major players than add yet ANOTHER auto company to the mix in Bluestar-Ssanyong.

So now the question is out there -- now that Bluestar has backed off with their MoU, will GM Daewoo step in and try to acquire Ssanyong to add to GM Daewoo? The easiest answer is yes, since it would fit with with GM's Asian strategy of expansion and give GM Daewood additional marketshare in Korea. It would only strengthen GM's position in Korea and in the region since they could easily be exported to China or SE Asia as Holdens, Chevys or perhaps as a Buick Luxury SUV for China. The add more to this, and perhaps detract from the idea of acquiring Ssangyong, GM Daewoo just agreed to import (and later build) Holden Statesman and Caprices to Korea and rebage them as Daewoos to compete with cars like the Hyundai Grandeur XG and the Ssangyong Chairman. Also, GM Daewoo has started development of it's own home grown SUV (possibly based on the new GM Theta chassis), but using diesel engines sourced from Italian expert VM Motori. So would the two strategies work together? Could GM buy Ssangyong and use its expertise to complement what GM already has lined up?

The most ironic thing about this is the fact that Daewoo actually owned Ssangyong and it was a major part of the company before the Daewoo conglomerate broke up in 1998 due to ridiculous losses. The company was spun off and actually did okay until recently. How funny is it that GM is looking to reacquire them? More Irony? GM's new agreement with Italian firm VM Motori is kind of odd since VM Motori is a wholely owned subsidiary of DaimlerChrysler AG. And since DCX also owns 10% of Hyundai-Kia Group and as a number of cooperations with them, all DCX has done is created more competition for their own alliance partner!

I wonder how this will end, but thought to offer it up as an article on GMI so we can debate over it.

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http://www.auto-asia.com/viewcontent.asp?pk=9184

The sale of Ssangyong Motor to Chinese chemicals group China National Bluestar (also known as Lanxing) has collapsed.

It is not clear whether Bluestar jumped ship (it claims to have walked away from the deal of its own accord) or was pushed (chief creditor Chohung bank says it stripped Bluestar of preferred bidder status because it refused to revise an initial bid with a more specific price offer and an official letter of support from the government in Beijing) but the negative effect on Ssangyong Motor’s share price was easy to see.
Shares in Ssangyong Motor, which has a market value of USD$1 billion but is weighed down by debts of some 1.3 trillion won (USD1.1 billion), shed as much as five percent of their value at one point before recovering a little.

Bluestar notified Samil PricewaterhouseCoopers, the accounting firm handling the sale for the creditors, that it would not go through with the deal under the terms and conditions presented by the creditors. At the same time, the creditors charged

Negotiations between Bluestar and the creditors, represented by Samil PricewaterhouseCoopers, have been going on for several months and it is likely to take more time to sort the situation out. Creditors are expected to set a new timetable for the sale today. Shanghai Auto Industry Corporation, which made a play for Ssangyong in the first round and which, unlike Bluestar, has a long track record in the automotive industry, is now the favourite.

Shanghai Auto is an ally of General Motors and owns equity in GM Daewo Auto & Technology Co.
 
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