Electrolux, the Swedish-based producer of home appliances, has made an offer to buy South KoreaÔÇÖs Daewoo Electronics.
The offer is reportedly worth as much as £295 million.
Daewoo Electronics, South Korea's third largest electronics goods maker by revenue, has been under a creditor-led restructuring programme since 2000, due to the massive debts it began to accumulate in the 1990s.
The Seoul-based company, once the flagship unit of the now-disbanded Daewoo Group, produces appliances such as refrigerators, vacuum cleaners and washing machines. Its shipbuilding and auto units are now independent companies in their own right.
Export-focused Daewoo competes with local rivals Samsung Electronics and LG Electronics, as well as a number of low-cost producers from China.
Electrolux is also a manfacturer of household appliances, including refrigerators, stoves and washing machines. The Stockholm-based company has said that it is looking to expand into fast-growing markets in South East Asia and Latin America. With its strong presence in the region, Daewoo Electronics would seem an ideal vehicle to help the company achieve that.
Electrolux has reportedly confirmed it has made a bid, but declined to comment on the amount or offer any further details.
Electrolux will be competing against a rival bid from IranÔÇÖs Entekhab Industrial Group, according to reports in the Swedish media. There have also been bids made by Korean cooking appliance maker Tong Yang Magic and a private equity consortiumÔÇöhowever, Electrolux and Entekhab are said to be the frontrunners.
There have been two previous unsuccessful attempts to sell Daewoo. In 2006, a consortium of India's Videocon Industries and the US private equity fund Ripplewood Holdings was picked as the preferred bidder. In 2008, Morgan Stanley PE, a unit of the global investment bank Morgan Stanley, was the top contender.
On both occasions, negotiations stalled, primarily because of disagreements over price.
Creditors own 97.5 per cent of Daewoo Electronics. Korea Asset Management Corporation is the largest shareholder with a 57.42 per cent stake, followed by Korea Exchange Bank with 6.79 per cent. Shinhan Bank holds 5.75 per cent, Woori Bank 5.37 per cent and Seoul Guarantee Insurance 5.23 per cent.
Woori Bank, which represents the creditors, said it planned to sign a final contract to sell the appliance maker by August.
