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Korea opens investment door
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March 18, 1998: 10:51 a.m. ET
German firm buys Daesang unit for $600M, biggest overseas purchase yet
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NEW YORK (CNNfn) - South Korea's currency-battered economy may be starting to open up to international investors..
Germany's BASF A.G. said Wednesday it will buy the lysine division of South Korea's Daesang Group for $600 million, the biggest buyout ever in Korea by an overseas buyer.
Paving the way for the deal, and possibly many more, are the floating of the won and a new flexibility about overseas ownership.
Also, the International Monetary Fund in December agreed to a $57 billion bailout of flailing Korean banks.
Starting next month, Korea will relax its restrictions against hostile takeovers from overseas bidders.
"This specific incident [the BASF purchase] may be just a blip on the radar screen a few years down the line," said Doug Wilde, an international investment strategist at Merrill Lynch. "Assets are on sale in Asia. Things are dirt cheap."
The Korean won has lost nearly 40 percent of its value against the U.S. dollar since last July, when currency and economic turmoil began to rock all of Asia.
In Seoul trading Wednesday, the won closed at 1,484.2 to the dollar. It had sunk to nearly 1,800 in January, after trading near 900 to the dollar as recently as October last year.
BASF, the German chemical giant, said the Daesang lysine division employs 234 people and had sales last year of about $250 million. Lysine, a molasses- and sugar-based product, is used primarily as an animal feed additive.
The BASF purchase includes Daesang's production plants in the seaport of Kunsan. 
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BASF A.G.
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