Analysts Skeptical of Samsung's Bid for Fokker

SEOUL -- By buying bankrupt Dutch planemaker Fokker, South Korea's Samsung Aerospace Industries would be taking a leap in the dark, analysts in Seoul said Tuesday.

Lured by a foothold in the global aerospace market, the company has been given an exclusive look into Fokker's books. Outlines of a deal are taking shape, but Samsung denies any agreement has been reached.

Whatever the outcome, several South Korean analysts who have been tracking Samsung's twisting path toward Fokker said they were skeptical.

The market for mid-sized passenger planes is already crowded, and it is far from clear what Samsung has to offer that would make the troubled Dutch company fly again, the analysts said.

"It's very hard to predict future demand for mid-sized aircraft," said Nam Kwon-oh at Ssangyong Investment Securities. "But the success of the venture would depend heavily on securing markets, and that may not be easy."

Chi Sung-chul, an analyst at LG Securities, said, "The only demand we can see would be from the South Korean government for military use."

Samsung has been touted before as an Asian savior for Fokker. Its parent, the giant Samsung Group, has deep pockets and great ambitions in aerospace.

But not until a proposed multimillion-dollar joint manufacturing deal with China fell apart did analysts believe Samsung would make a serious pitch for the heavily indebted European company after it was cut adrift by parent Daimler Benz Aerospace.

"The Sino-Korean project to build 100-seat passenger jets could have been a lucrative deal for Samsung," said Nam. "The deal would have secured a vast market -- China."

"Everyone's looking at Asia as the fastest-growing area for the aeronautics business, be it little jets or regional airliners," said Daniel Harwood, the Seoul-based regional director of HG Asia.

"But there's huge oversupply," he said. "What can Samsung bring to the game that Fokker couldn't by itself?"

South Korean media reports have said Samsung is ready to sink $180 million into acquiring a 70-percent stake in Fokker, a figure Nam said was a reasonable estimate.

But Nam said the final price tag after paying off debt and making necessary investments in new production could be closer to $1.5 billion.

"I don't think it's worth it," said Chi. "There is no merit for all that money to be invested."