Seoul - Doosan is one of the largest chaebol, or conglomerates, in South Korea, with some $20 billion in sales. A maker of construction equipment and builder of industrial plants, Doosan is not nearly as well-known globally as Samsung, LG, or Hyundai Motor. But in Korea it's seen as the chaebol that pulled off the biggest foreign takeover ever. And that, it turns out, has proven to be a problem.
Doosan's $4.9 billion acquisition in 2007 of Bobcat, a North Dakota maker of compact earth movers, was modest by U.S. standards. But it was a seminal moment for Korea Inc., which had largely avoided acquisitions abroad until Doosan outbid others for Bobcat and two related businesses, which all belonged to Ingersoll-Rand.
But today, Doosan Infracore, the unit that controls Bobcat, is reeling. The economic crisis has halved Bobcat's revenues and pushed Doosan Infracore into a loss of $46 million for the first six months of 2009. "The timing [of the takeover] was bad," concedes Lee Sang Hoon, Doosan's chief strategist. "But no one could have thought the worst recession in 70 years was in store."