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Daimler, Hyundai eye pact
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June 23, 2000: 8:35 a.m. ET
Alliance set for Monday; German firm to take 10% stake, says source
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LONDON (CNNfn) - DaimlerChrysler AG is expected to increase its Asian exposure next week by striking a deal in South Korea, allying itself with Hyundai Motors to make a bid for indebted rival Daewoo Motors, according to a person familiar with the matter.
The Stuttgart, Germany-based automaker, the world's fifth-largest, has scheduled a news conference in Seoul next Monday to air its new alliance with Hyundai, a DaimlerChrysler spokesman said Friday. A person familiar with the German company's plans for the region told CNNfn.com that a media report saying DaimlerChrysler would take a 10 percent stake in Hyundai was probably accurate.
The Financial Times earlier reported that the automaker would take an equity stake in Korea's biggest car company.
Such an announcement would come less than three months after DaimlerChrysler (FDCX) agreed to a buy 34 percent of Mitsubishi Motors of Japan for $2 billion. Shares of DaimlerChrysler rose 0.45 percent to  55.75 in early afternoon Frankfurt trading.
An analyst said DaimlerChrysler, while the world's largest truck maker, doesn't have a significant presence in the commercial vehicles business in Asia - and an alliance with Hyundai or a buyout of Daewoo would help deliver that. Mitsubishi brought only a car business, the analyst said.
"Their big interest is the commercial vehicle side -- it's the big black hole relative to the rest of the business," said the analyst, who spoke on condition of anonymity. "I don't consider [the purchase of a stake] to be an extraordinary possibility for them," the analyst added. U.S.-based General Motors Corp. (GM: Research, Estimates), Ford Motor Co. (F: Research, Estimates) and Italy's Fiat are expected to also make bids for Daewoo.
A Hyundai official told Reuters earlier this week that the Korean automotive leader was putting the finishing touches to plans to create a consortium with DaimlerChrysler to bid jointly for Daewoo, whose parent company has put the troubled Korean automaker on the auction block.
Other European carmakers have been nabbing assets in Asia: France's Renault (PRNO) agreed in April to buy a controlling stake of Korea's Samsung Motors and last year acquired a control minority share of Japan's Nissan Motors. The region is expected to see faster growth in the auto sector than either Europe or the U.S. over the next few years, according to analysts.
Hyundai Motor and its sister firm Kia Motors Corp. account for about three-quarters of the Korean car market, where almost 1 million vehicles were sold last year. Pairing it with Daewoo would deliver nearly all of the market, a degree of dominance that might run afoul of antitrust regulators. 
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Hyundai
DaimlerChrysler
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