South Korean conglomerates Daewoo, Hyundai and Samsung have agreed to merge their individual aerospace divisions, creating a newcompany to be equally owned by the partners.
Park Jong Wook, assistant manager for international finance at Samsung, says a memorandum of understanding has been signed on the establishment of the as-yet unnamed company.
Park says he expects full details to be finalised by the end of the year. He also says that the South Korean government will take a stake of at least 25% after the company's formation, while foreign firms will be invited to purchase shares.
It is thought that the government will take a stake in return for absorbing the three companies' debts, although Park would not confirm this.
The South Korean government ordered the three conglomerates - as well as two others without aerospace divisions - to realign their operations in key sectors of the economy to avoid "duplicate investment".
The new aerospace company will compete with Korean Air (KAL) Aerospace for parts-making work from major manufacturers. KAL Aerospace had been invited to join the company but decided against it.
Source: Flight Daily News
