Tata Motors Ltd has agreed to buy South Korea’s Daewoo Commercial Vehicle Corp — the truck-making arm of the failed Daewoo conglomerate — for about 140 billion won, or $118 million (Rs 534 crore). This is the second major acquisition by the Tatas after they took over Tetley Tea of UK.Daewoo Commercial and Tata signed a binding memorandum of understanding (MoU) on Wednesday, the South Korean truck firm said in a statement. A final contract is expected by the end of this year. Tatas going global MUMBAI: If any group which is all set to become India’s first home-grown multinational, then it has to be Tata group of companies. Chairman Ratan Tata was named Ernst & Young’s businessman of the year award last week, for giving a focus to the group. With this latest acquisition, Ratan Tata is taking the group global. His company is also exporting Rover AG of UK 100,000 Indicas which will be sold in UK as CitiRover. Tata, however, has competition in Reliance Industries which has also announced buyout of US-based Flag Telecom for over Rs 1,000 crore. (ENS) ‘The transaction is expected to close in the next two to three months, subject to a final due diligence of DWCV’s operations, the negotiation of further agreements and receipt of applicable regulatory approvals in India and Korea,’ Tata Motors said in statement here.Tata Motors had been named as the ‘preferred bidder’ for Daewoo Commercial Vehicle Company. This company was part of the beleaguered Daewoo Motor Company, till it was hived off as a separate company in November 2002. It has an annual production capacity of 20,000 vehicles. Tata Motors is the only ‘preferred bidder’ for the South Korean company. Ten bidders are believed to have been in the race for Daewoo Commercial Vehicle Company.Daewoo Commercial Vehicle is the second largest player in South Korea with a market share of about 26 per cent. It produces trucks, tractors and other utility vehicles. It has been under court protection while its parent Daewoo Motor sold most of its passenger car division to General Motors, creating GM Daewoo Auto and Technology Company.Since Volvo made its entry into India, Tata Motors were under pressure to produce high end trucks and buses. Though the Tata Motors improved its in-house products it was not unable to make any dent into Volvo’s market. With its acquisition of Daewoo’s truck unit, the company will be able to take on multinationals in India and even get into the lucrative Chinese market. Daewoo Commercial is the second-biggest maker of heavy vehicles in South Korea with a market share of 26 per cent.Its Kunsan plant can produce 20,000 vehicles a year and it recorded 12 billion won in operating profit in the first half this year, the company said. The South Korean firm said in a statement the expected sale price did not take into account some 47 billion won in unpaid bills and reserve requirements.Sale of the truck unit will mark the end of Daewoo Motor Co’s restructuring. Its core passenger car operations were transformed into GM Daewoo Automotive Technology Co after receiving investment from GM.
