Foreign acquisitions by Iranian companies are the rarest of M&A beasts. But Iranian white-goods distributor Entekhab Industrial is set to buy South Korea’s troubled Daewoo Electronics for $520m. The move is likely to raise eyebrows in the US, where Iran’s foreign trade is viewed with suspicion.
However, for Daewoo’s creditors, Entekhab’s arrival offers a welcome exit - eleven years, three failed purchase attempts and 1,500 employee redundancies after the Daewoo conglomerate collapsed under the weight of its debts. According to mergermarket data, the deal is the first since at least 2004 where a Middle Eastern company has bought a Korean counterpart.
Despite its domestic turmoil, Daewoo has remained a premium brand in Middle East, and Entekhab, the major distributor of its Daewoo products in the Middle East, hopes to increase sales in Turkey, north Africa, and eastern Europe.
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