South Korea's debt-ridden Daewoo Group will sell most of its electronic home appliance unit to U.S. investment fund Walid Alomar & Associates for $3.2 billion. Walid Alomar will take over Daewoo Electronics' assets in South Korea, the United States, Latin America, Japan, Australia, England and France.
Daewoo Electronics, South Korea's No. 2 home appliance maker, generates $3.3 billion in annual sales. Beverly Hills, California-based Walid Alomar has formed a company called New DEC to operate the assets.
The purchase is interesting in that an American interest is buying a foreign consumer electronics company. The trend has been the opposite for years, with American companies exiting many of the lower-profit CE categories or selling their assets to foreign groups. Last year, LG Electronics, another South Korean company, bought Zenith Electronics Corp.
Ironically, Daewoo's own effort two years ago to buy Thomson Multimedia, the French government-owned company that owns the RCA and General Electric consumer electronics businesses fell through. Opposition in France stopped that proposed deal.
Walid Alomar, head of the investment group, is a 56-year-old engineer from Saudi Arabia who designs systems for refineries. He has also been involved in energy and telecommunications projects. Walid Alomar & Associates is buying about 80% of Daewoo Electronics. Buying the entire company would have meant also assuming it's more than $4 billion in debt. Of the 22 current business units, the Daewoo Group will retain only its six car-related affiliates. General Motors is said to be interested in acquiring control of Daewoo Motor, the heart of the car business.
While Daewoo Electronics itself does not have big brand recognition among U.S. consumers, it does make products sold by other companies, like monitors for Compaq and Hewlett-Packard as well as 13- and 19-inch TV sets for Zenith.