India's biggest bus and truck maker Tata Motors on Monday completed the acquisition of Korea-based Daewoo Commercial Vehicle Co for $102 million as part of its strategy to become a global player.
"This was the largest acquisition by any Indian company in Korea and I look forward to increase Tata group's presence in the country," Tata Motors chairman Ratan Tata said.
With the formal acquisition, DWCV, Korea's second-largest truck maker, becomes a wholly-owned subsidiary of Tata Motors which aims to become one of the major truck manufacturers of the world.
"This is a historic moment for Tata Motors," he said.
Tata also received the newly allotted shares of DWCV, which has 25 per cent market share, from official receiver Kwang Ok Chae.
DWCV will become a wholly owned subsidiary of Tata Motors with Kwang Ok Chae as president and representative director of the company once the court receivership is terminated.
Daewoo's commercial vehicles' Gunsan plant was put on the block following the collapse of Daewoo Motors in 2002.
DWCV posted a turnover of $250 million and a net profit of $6 million in 2003.
The acquisition would mark a major commitment on behalf of the Tatas to make DWCV an "extremely profitable" company which would grow both in Korea as well as globally, Tata said.
Allaying employees' fears, Tata assured that DWCV would remain a Korean company managed by Koreans.
DWCV, with a production capacity of 20,000 units annually, was under court receivership since it was hived off in November 2002 from Daewoo Motors, the erstwhile second-biggest automaker of Korea.
Tata Motors has already announced its plans to tap international markets to raise $500 million to fund the acquisition and product development.
Tata said the products, plans and enthusiasm shown by the employees of DWCV led him to reach the decision.
Indian Ambassador P S Ray said the acquisition was a landmark in bilateral relations and the move would set a trend.
"Much of India's honour in the region would depend on how the Tatas perform here," Ray said.
Speaking on the occasion, provincial governor Hyon Wook Kang hoped Tata group would continue to invest in Korea and make DWCV a globally competitive company.
