Doosan Seeks to Buy Skoda Power in $631 Million Deal

By Seonjin Cha

June 22 (Bloomberg) -- Doosan Group, owner of South Korea’s biggest power-equipment maker, is seeking to buy Skoda Power AS of the Czech Republic in a deal that may cost 800 billion won ($631 million).

Doosan Group has joined a tender to buy the power-equipment maker and plans to raise most of the funds needed for the acquisition from South Korea, spokesman Bae Kyun Ho said today by phone in Seoul.

Buying Skoda will allow Doosan to access technology to make power-plant equipment and bolster the business, Bae said. The South Korean company in 2006 purchased boiler designer Mitsui Babcock Energy Ltd. to diversify its overseas operations.

“Doosan has been seeking to expand its power-plant business and purchasing Skoda Power would help it diversify markets with an additional lineup in turbine,” said Song Sang Hoon, a Seoul-based analyst at Kyobo Securities Co.

Doosan Heavy Industries & Construction Co., Doosan Group’s power-equipment maker unit, dropped 0.1 percent to 70,100 won as of 10:41 a.m. in Seoul, compared with the 0.2 percent decline in the Kospi index.

The bid was reported by the Korea Economic Daily today.

To contact the reporter on this story: Seonjin Cha in Seoul at scha2@bloomberg.net