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Daimler ties Hyundai deal
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June 26, 2000: 5:34 a.m. ET
Automaker pays $428M for 10% stake; plans car alliance, joint Daewoo bid
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LONDON (CNNfn) - DaimlerChrysler AG agreed Monday to pay $428 million for a 10 percent stake in Hyundai Motor Co. and signed a pact with South Korea's top automaker that paves the way for a joint bid for the country's next-largest car manufacturer, Daewoo Motor Co.
The deal agreed by DaimlerChrysler, the global No. 5 automaker by units sold, will see it create a 50:50 joint venture with Hyundai to produce Daimler vans and trucks. The German and Korean companies will also team up with DaimlerChrysler's Japanese partner, Mitsubishi Motor Co., to develop a new range of small cars.
DaimlerChrysler paid $2.1 billion for a 34 percent stake in Mitsubishi in March. The Japanese firm already has an alliance with Hyundai.
Hyundai Motor and Kia, both part of Hyundai Group, account for 75 percent of the Korean domestic car market, and have been seeking a partner to make a bid for Daewoo. Such a deal which would give Hyundai a near-monopoly of the Korean market.
DaimlerChrysler's move in Korea follows the acquisition in April by France's Renault SA (PRNO) of a 70 percent stake in third-ranked Samsung Motor Co. for $560 million.
DaimlerChrysler said it would submit a joint "non-binding" bid for Daewoo Motor, and explore ways to bring it into its new Asian alliance.
 Daewoo Group is due to open the auction of its auto arm this week, having run into financial difficulties last year.
General Motors (GM: Research, Estimates) and Italy's Fiat SpA are also reported to be interested in making a joint bid for Daewoo, which produced 2 million vehicles last year. Ford Motor Co (F: Research, Estimates) is lining up a solo bid.
DaimlerChrysler (FDCX) shares rose 0.5 percent to  56.20 in Frankfurt Monday. 
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