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Renault Expands Asian Empire with Samsung Negotiations

Strategic Insights

— 1 min read

Renault, the French carmaker, is poised to expand its Asian presence after beginning exclusive negotiations with South Korea's Samsung Motors. The talks, which started on December 30, aim to acquire all or part of Samsung Motors' operating assets, excluding debt. Renault sees the acquisition as a way to establish a stronger foothold in the Korean market and build on its existing alliance with Nissan.

Key Takeaways:

  • Renault is negotiating the possible acquisition of Samsung Motors' operating assets, including a factory, a product line, and a dealer network.
  • The negotiations do not involve taking on Samsung Motors' debt.
  • Renault aims to use the acquisition to gain a privileged access to the Korean market and establish a broader base in Asia.
  • Samsung Motors began operations in 1998 and was placed under court receivership by its parent company, Samsung Group, last June.
  • Patrick Faure, chairman of Renault VI, has held talks with Samsung and Daewoo in the past.
  • Ford, the world's second-largest carmaker, is considering participating in an auction for Daewoo Motors, which has also attracted attention from General Motors and Hyundai.
  • Ulrich Bez, former vice-president for product development and engineering at Daewoo Motors, has been hired by Ford as a consultant to aid in its decision-making process.

Statistics:

  • Renault acquired 36.8% of Nissan Motor last year.
  • The negotiations between Renault and Samsung are expected to last for two to three months.
  • Samsung Motors has one factory, one product line, and a dealer network to be acquired.
  • Ford is due to hold talks with Korea Development Bank, Daewoo's lead creditor, today.
  • GM has made a formal proposal to take over all of Daewoo's South Korean operations and some of its overseas facilities.

Sources:

  • "Financial Times Limited 1999. All Rights Reserved."
  • Financial Times, copyright 1999
  • Renault, as quoted in the Financial Times
  • Patrick Faure, chairman of Renault VI, as quoted in the Financial Times
  • Samsung Group, as quoted in the Financial Times
  • General Motors, as mentioned in the Financial Times
  • Hyundai, as mentioned in the Financial Times
  • Ford, as quoted in the Financial Times

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