(EDITORIAL from the JoongAng Daily on Nov. 17) - Take time to get it right

Hyosung Group has withdrawn its bid to acquire Hynix Semiconductor. Earlier this
year, Hanwha Group also forfeited its plan to buy shares in Daewoo Shipbuilding
and Marine Engineering Company, and Kumho Asiana Group, which bought Daewoo
Engineering and Construction, is now trying to sell it back. These are examples
of how corporations with public funding have failed to find new owners. Their
failures are due to various factors, including overzealous selling, rumors about
government favors and lack of financing.
Even so, their creditors and the Korea Asset Management Corporation are in a
hurry to sell the companies by year???s end. The bidding price for Daewoo
Shipbuilding and Marine Engineering, Hynix, Daewoo E&C and Hyundai Engineering
and Construction each exceeds several trillion won (several billion dollars) and
there are other companies worth several hundred billion won that are waiting to
be merged and acquired, including Daewoo Electronics and Ssangyong Engineering
and Construction.
But it will be difficult to find buyers for all of these companies in a market
that has recently hit bottom. Large conglomerates are showing no interest because
they are focused on improving their own businesses. Midsized companies that have
shown interest in acquisition deals cannot afford them because they are repaying
their own excessive loans.
It is true that the most important factor in selling these publicly financed
companies is to ensure they are sold at full price. That is why creditor banks
are so interested in selling the companies to foreign buyers. But it has been
proven recently through the Ssangyong Motor incident that technology can be
leaked to foreign companies in deals like these, which can have a negative impact
on our national competitiveness and the industry as a whole.
It is natural to want to make the sales. But if the bids don???t take the current
market conditions into account, the deals will end in failure, as we have seen
with Hynix, Daewoo Shipbuilding and Marine Engineering and Daewoo E&C. Adding to
the difficulty is the fact that the shipbuilding and construction industries have
become stagnant while the semiconductor industry is gradually showing
improvement.
Rather than speeding through deals, the government should try to balance the
market. The creditors - Korea Development Bank, Korea Asset Management
Corporation and Korea Finance Corporation - should think about that and take
steps to decrease the shock to the market. At a time like this, it is better to
take time to get things right than to rush ahead, only to fail.
(END)