Ssangyong Motor's Narrow Escape... HAAH Automotive Likely to Submit Acquisition Proposal
[Asia Economy Reporter Kiho Sung] It has been reported that HAAH Automotive Holdings, a U.S. automobile distribution company in which China's Chery Automobile holds shares, is preparing an acquisition proposal to invest in Ssangyong Motor. However, even if the investment takes place, it is uncertain whether HAAH Automotive will be able to acquire enough shares to become the major shareholder of Ssangyong Motor.
According to the automotive industry and financial circles on the 20th, HAAH Automotive is reportedly preparing a 'binding offer (acquisition proposal)' to be submitted around mid-next month for investment in Ssangyong Motor.
HAAH Automotive is an automobile distribution company based in Irvine, California, U.S., founded by Chairman Duke Hale, who previously served as vice president at Volvo, Mazda, Jaguar, and Land Rover. Chairman Hale is promoting the overseas expansion of Chinese automakers, and in particular, plans to launch Chery's sport utility vehicle (SUV) brand 'Vantas' in the U.S. and Canada by the end of next year.
Because of this, there is speculation that after Chery acquires Ssangyong Motor through its stake in HAAH Automotive, it might indirectly enter the U.S. automobile market via the Korea-U.S. Free Trade Agreement (FTA).
However, it is still unknown whether HAAH Automotive will acquire management rights of Ssangyong Motor or if it will be limited to a minority share sale. It is also unclear whether HAAH Automotive has sufficient financial capacity. Last year, HAAH Automotive's sales amounted to only $20 million (approximately 23 billion KRW), leading to concerns that acquiring Ssangyong Motor, which requires large-scale funding, would be difficult.
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Nonetheless, there are also views that HAAH Automotive might leverage support from Chery or collaborate with financial investors (FI) to proceed with acquiring management rights of Ssangyong Motor.
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