Today’s BusinessWeek outlines the struggles of Korea’s biggest (in terms of purchase dollars) acquisition of a foreign company.

Per the article:

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….

But today, Doosan Infracore, the unit that controls Bobcat, is reeling…. “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.”

Discussed in TMH here in late July 2007, much was made of the acquisition at the time.  Personally, I was lukewarm on the deal and wrote a comment that foreshadowed the present:

[Doosan] Infracore, in the short term, overpaid. The only way this deal makes sense is if Bobcat’s sales and profits rise at least 30% in the next 5 years, otherwise, it may be an albatross around Doosan’s neck, sucking up free cash flow that can otherwise be used to fund growth and new product development….

The problem is Bobcat hasn’t grown (it’s done the opposite) and now that’s causing problems.